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

The Journal Entry is shown below in the explanation section

Step-by-step 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)