109 to 1010 BE109 Price Company issues 400000 20year 7 bonds

10-9 to 10-10

BE10-9 Price Company issues $400,000, 20-year, 7% bonds at 101, Prepare the journal entry to record the sale of these bonds on June 1, 2019 BE10-10 Meera Corporation issued 4,000, 8%, 5-year, $1,000 bonds dated January 1, 2019, at 100. Interest is paid each January 1. (a) Prepare the journal entry to record the sale of these bonds on January 1, 2019. (b) Prepare the adjusting journal entry on December 31, 2019, to record interest expense. (c) Prepare the journal entry on January 1, 2020, to record interest paid.

Solution

10-9

Price Company

Journal

10-10

Meera Corporation

Journal

Date	Account	Debit	Credit
June 1, 2019	Cash	404,000
	Bonds payable		400,000
	Bond premium		4,000