Island Cove Corporation had the following bond issue:
Date of issue/sale: May 1, 20-A
Principal: $500,000
Sale price of bonds: 104
Life of bonds: 10 years
Stated rate: 6% a year payable semiannually on October 31 and April 30

Required:
Prepare the following general journal entries.
a.
The issuance of the bonds on May 1, 20-A.
b.
The first interest payment for 20-A.
c.
The adjusting entry for December 31, 20-A.
d.
The reversing entry for January 1, 20-B.

Question

Island Cove Corporation had the following bond issue:
Date of issue/sale: May 1, 20-A
Principal: $500,000
Sale price of bonds: 104
Life of bonds: 10 years
Stated rate: 6% a year payable semiannually on October 31 and April 30
​
Required:
Prepare the following general journal entries.
a.
The issuance of the bonds on May 1, 20-A.
b.
The first interest payment for 20-A.
c.
The adjusting entry for December 31, 20-A.
d.
The reversing entry for January 1, 20-B.

Quizplus · Accepted Answer

The Answer of Island Cove Corporation had the following bond issue:
Date of issue/sale: May 1, 20-A
Principal: $500,000
Sale price of bonds: 104
Life of bonds: 10 years
Stated rate: 6% a year payable semiannually on October 31 and April 30
​
Required:
Prepare the following general journal entries.
a.
The issuance of the bonds on May 1, 20-A.
b.
The first interest payment for 20-A.
c.
The adjusting entry for December 31, 20-A.
d.
The reversing entry for January 1, 20-B.

Island Cove Corporation Had the Following Bond Issue