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24 August, 21:47

Schlitterbahn Waterslide Company issued 34,000, 10-year, 7 percent, $100 bonds on January 1 at face value. Interest is payable each December 31. (a) The issuance of these bonds on January 1. (b) The first interest payment on December 31.

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  1. 24 August, 21:56
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    The journal entries are shown below:

    On January 1

    Cash A/c Dr $3,400,000 (34,000 * $100)

    To Bonds payable A/c 3,400,000

    (Being issuance of the bond is recorded)

    On December 31

    Interest expense A/c Dr $238,000 ($3,400,000 * 7%)

    To Cash A/c $238,000

    (Being interest payment is recorded)
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