The journal entry for the issuance of bonds for cash on January 1 is: Debit Cash $2,700,000, Credit Bonds payable $2,700,000.
<h3>Journal entry</h3>
1. January 1
Debit Cash $2,700,000
Credit Bonds payable $2,700,000
(To record issuance of bonds for cash)
2. June 30
Debit bond Interest expense $81,000
Credit Cash $81,000
($2,700,000×6%/2)
(To record first semiannual interest payment)
December 31
Debit bond Interest expense $81,000
Credit Cash $81,000
($2,700,000×6%/2)
(To record second semiannual interest payment)
3. December 31, 2021
Debit Bonds payable $2,700,000
Credit Cash $2,700,000
(To record payment of bonds payable)
Therefore the journal entry for the issuance of bonds for cash on January 1 is: Debit Cash $2,700,000, Credit Bonds payable $2,700,000.
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