Question

Entries for Issuing Bonds Thomson Co. produces and distributes semiconductors for use by computer manufacturers. Thomson issued $800,000 of 10-year, 6% 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. If an amount box does not require an entry, leave it blank. May 1 Nov. 1 Dec. 31

Answer 1

Answer:

The Journal Entry is shown below in the explanation section

Explanation:

The first step to take is to make use of the Journal entry.

Journal Entries for issuing Bonds

1 May       Cash                            800,000

               Bonds Payable                                              800,000

1 Nov       Interest expense          24,000

               Cash                                                               24,000

               (800,000* 6%*6/12)

31 Dec    Interest expense            8000

              Interest Payable                                               8000

              (800,000* 6%* 2/12)