Chyrsalys Corporation issues 4000000 in serial bonds on Jan

. Chyrsalys Corporation issues $4,000,000 in serial bonds on January 1, Year One, with a stated cash interest rate of 4 percent. The bonds are issued at face value. The bond terms specify that interest and $2,000,000 in principal will be paid on December 31, Year One and December 31, Year Two. a. What journal entry, or entries, is recorded on December 31, Year One? b. What journal entry, or entries, is recorded on December 31, Year Two?

Journal entries :

Sl no.	Date	Accounts Titles	Debit $	Credit $
a	Dec 31, yr 1	Bonds payable	2000000
		Interest Expense ($4m*4%)	160000
		Cash		2160000
		(repayment principle alongwith interest)

b	Dec 31, yr 2	Bonds payable	2000000
		Interest Expense ($2m*4%)	80000
		Cash		2080000
		(repayment principle alongwith interest)

. Chyrsalys Corporation issues $4,000,000 in serial bonds on January 1, Year One, with a stated cash interest rate of 4 percent. The bonds are issued at face va

Chyrsalys Corporation issues 4000000 in serial bonds on Jan

Solution

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