Question

On January 1, 2019, Providence, Inc., issues $1,000,000 of 10 percent, 5-year bonds at par value. Complete the necessary journal entry by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.

Answer 1

Answer:

                                   Dr.                Cr.

January 1, 2019

Cash                     $1,000,000

Note Payable                             $1,000,000

Explanation:

Bond issued for $1,000,000 and cash received against it. So, cash id debited and a liability is created in this event. Interest accrued will be charged as interest expense at the end of period.