Entries for Issuing Bonds Thomson Co produces and distribute

Entries for Issuing Bonds Thomson Co. produces and distributes semiconductors for use by computer manufacturers. Thomson Co. issued $930,000 of 10-year, 10% bonds on May 1 of the current year at face value, with interest payable on May 1 and November 1 The fiscal year of the company is the calendar year. May 1 Issued the bonds for cash at their face amount. Nov. 1 Paid the interest on the bonds. Dec. 31 Recorded accrued interest for two months. Journalize the entries to record the above selected transactions for the current year. Round your answers to whole number. May 1 Cashy Bonds Payable Interest Expense Cash Nov. 1 Dec. 31 Interest Expense Interest Payable

Solution

1-May Cash 930000       Bonds payable 930000 1-Nov Interest expense 46500 =930000*10%/12*6       Cash 46500 31-Dec Interest expense 15500 =930000*10%/12*2       Interest payable 15500