Question

Madison Co. issued $100,000, 4.5%, 15 -year bonds payable at face value, on Jan. 1, 2019 a. Journalize the issuance of the bonds b. Journalize the first semi - annual interest payment and amortization of the discount or premium.

Answer 1

Journal entries are as follows:

Date	Account and Explanation	Debit($)	Credit($)
a)	Cash	100,000
Jan.1, 2019	Bond Payable		100,000
	(Recorded the issue of the bond)
b)	Interest Expenses ($100,000 * 4.5% * 6/12)	2,250
June 30, 2019	Cash		2,250
	(Recorded the payment of Interest Expenses)