Description
On January 1, 2013, Chavez Corp issued $200,000 of 10-year, 6 percent bonds at their face value. Interest is payable on Dec 31 of each year with the first payment due Dec 31 2013.
A. Prepare general journal entries related to these bonds for 2013/2014
Explanation & Answer
Chavez Corporation
Date Dr Cr
$ $
Jan 1, 2013 Cash 200,000
Bonds Payable 200,000
( To record issuance of Bonds)
Dec 31, 2013 Interest Expense on Bonds 12,000
Cash 12,000
(To record Interest Expense on Bonds Payable $200,000*6%)
Dec 31, 2014 Interest Expense on Bonds 12,000
Cash 12,000
( To record Interest Expense on Bonds Payable $200,000*6%)
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