Question

Brussels Enterprises issues bonds at par dated January 1, 2019, that has a $3,500,000 par value, mature in four years, and pay 9% interest semiannually on June 30 and December 31.

1. Record the entry for the issuance of bonds for cash on January 1.
2. Record the entry for the first semiannual interest payment and the second semiannual interest payment.
3. Record the entry for the maturity of the bonds on December 31, 2022 (assume semiannual interest is already recorded).

Record the cash paid for the first semiannual interest payment on June 30.

Record the cash paid for the second semiannual interest payment on December 31.

Record the payment of the bonds at maturity (assume semiannual interest is already recorded)

Answer 1

1
	General Journal	Debit	Credit
January 1, 2019	Cash	3500000
	Bonds Payable		3500000
2
June 30,2019	Interest expense	157500		=3500000*9%*6/12
	Cash		157500
December 31, 2019	Interest expense	157500		=3500000*9%*6/12
	Cash		157500
3
December 31, 2022	Bonds payable	3500000
	Cash		3500000