Answer:
May 1
Dr Cash408,000
Cr Bonds Payable 400,000
Cr Interest Expense 8,000
July 1
Dr Interest Expense 12,000
Cr Cash 12,000
Dec 31
Dr Interest Expense 12,000
Cr Interest Payable12,000
Explanation:
May 1,
Dr Cash408,000
Cr Bonds Payable 400,000
Cr Interest Expense 8,000(Accrued Interest = 400,000 x 6% x 4/12)
July 1
Dr Interest Expense 12,000
Cr Cash 12,000(Bond interest expense = 400,000 x 6% x 6/12)
Dec 31
Dr Interest Expense 12,000
Cr Interest Payable12,000
