Sage Hill Inc. Issues $254,000, 10-year, 10% bonds at 97. Prepare the journal entry to record the sale of these bonds on March 1, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

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20 August, 05:27

Sage Hill Inc. Issues $254,000, 10-year, 10% bonds at 97. Prepare the journal entry to record the sale of these bonds on March 1, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

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Giovanna Shields · Answer 1

To record final annual interest and bond repayment:

2017

Mar 1

Bonds interest expense $25,400

Bonds payable $254,000

Cash $279,000

On March 1, 1997, the date of issuance, the entry is:

1997

Mar 1

Cash $254,000

Bonds payable $254,000

On each March 1 for 10 years, beginning March 1, 1997 (ending March 1, 2017), the entry would be (Remember, calculate interest as Principal x Interest Rate x Time)

Mar 1

Bond Interest Expense ($100,000 x 12% x 1) $25,400

Cash $25,400