Question

On August 1, 2022, Bramble Corp. issued $482,400, 8%, 10-year bonds at face value. Interest is payable annually on August 1. Bramble’s year-end is December 31.

(a) 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
Aug. 1	enter an account title to record the issuance of the bonds on August 1	enter a debit amount	enter a credit amount
	enter an account title to record the issuance of the bonds on August 1	enter a debit amount	enter a credit amount

(b)

Prepare the journal entry to record the accrual of interest on December 31, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31	enter an account title to record the accrual of interest on December 31, 2017	enter a debit amount	enter a credit amount
	enter an account title to record the accrual of interest on December 31, 2017	enter a debit amount	enter a credit amount

(c) Prepare the journal entry to record the payment of interest on August 1, 2023. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Aug. 1	enter an account title to record the payment of interest on August 1, 2018	enter a debit amount	enter a credit amount
	enter an account title to record the payment of interest on August 1, 2018	enter a debit amount	enter a credit amount
	enter an account title to record the payment of interest on August 1, 2018	enter a debit amount	enter a credit amount

Answer 1

--Required journal entries

Date	Accounts title	Debit	Credit
01-Aug	Cash	$482,400
	Bonds Payable		$482,400
	(to record issuance)
31-Dec	Interest Expense	$16,080
	Interest Payable ($482400 x 8% x 5/12)		$16,080
	(to record accrual of 5 month interest)
01-Aug-18	Interest Payable	$16,080
	Interest Expense ($482400 x 8% x 7/12)	$22,512
	Cash ($482400 x 8%)		$38,592
	(to record payment of interest)