Prepare the journal entry to record the issuance of the bonds.

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On May 1, 2017, Herron Corp. issued $650,000, 5%, 5-year bonds at face value. The bonds were dated May 1, 2017, and pay interest annually on May 1. Financial statements are prepared annually on December 31.
Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date Account Titles and Explanation Debit Credit
May 1, 2017
SHOW LIST OF ACCOUNTS
Prepare the adjusting entry to record the accrual of interest on December 31, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,675.)

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Darshita6.14K 0 Comments
Date Account Titles and Explanation Debit $ Credit $
May 1-2017 Cash 650,000
To Bonds Payable

(Issued 5-yr, 5% bond at FV )

 650,000
December31-2017 Interest Expenses 21667
To interest Payable – Bond

( To record 8 months of interest
December -31-2017)

 21667

Herron Corp.
Balance Sheet (Partial)
For the Month Ended December 31, 2017

Liabelity Amount In$ Assets Amount in $
Long –Term Liabilities:
Bonds Payable (Due on 2016) 650,000
Current Liabilities
Bond Interest Payable 21,667
Date Account Titles and Explanation Debit $ Credit $
May 1-2018 Interest Payable 21667
To Cash

(To record interest paid in cash )

 21,667\
December 31-2018 To intrest expenses 32,500
To interest Payable – Bond

( To record 12 months of interest
December -31-2018)

 32,500
Jan. 1, 2019 Interest Expenses 21667
To Cash

((To record payment of interest))

 21667
Jan. 1, 2019 Bonds Payable 650000
Loss on Bond Redemption 65000
To Cash

(To record redemption of the bonds)

 656,500

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