Austin Co. produces and distributes semiconductors for use by computer manufacturers. Austin Co....
Question:
Austin Co. produces and distributes semiconductors for use by computer manufacturers. Austin Co. issued $15,000,000 of 12 year, 12% bonds on May 1 of the current year, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year. Journalize the entries to record the following selected transactions for the current year:
May 1: Issued the bonds for cash at their face amount.
November 1: Paid the interest on the bonds.
December 31: Recorded accrued interest for two months.
Journal Entry:
A journal entry is a daily recording of financial transactions made by the company. The journal entries are summarized in a trial balance at the end of the accounting period to assist in making financial statements.
Answer and Explanation: 1
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| Date | Accounts | Debit | Credit |
| May 1 | Cash | 15,000,000 | |
| Bonds Payable | 15,000,000 | ||
| -bonds are issued at face value | |||
| November 1 | Interest... |
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Journal Entries and Trial Balance in Accounting
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Chapter 3 / Lesson 10
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Discover the meaning of a journal entry and a trial balance, types of journal entries, how a general ledger differs from a trial balance, and some examples.
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