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ACC 291 WileyPLUS Week 3 Assignment Question 4 Exercise E10-11

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ACC 291 WileyPLUS Week 3 Assignment Question 4 Exercise E10-11
On January 1, Flory Company issued $300,000, 8%, 5-year bonds at face value. Interest is
payable semiannually on July 1 and January 1.
Prepare journal entries to record the following events.
Correct.
The issuance of the bonds.
Date Account/Description Debit Credit
Jan. 1 Cash 300000
Bonds payable 300000
Correct.
The payment of interest on July 1, assuming no previous accrual of interest.
Date Account/Description Debit Credit
July 1 Bond interest expense 12000
Cash 12000
Correct.
Date Account/Description Debit Credit
July 1 Bond interest expense 12,000
Cash ($300,000 × 8% × 1/2) 12,000
The accrual of interest on December 31.
Date Account/Description Debit Credit
Dec. 31 Bond interest expense 12000
Bond interest payable 12000

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