Question

Schlitterbahn Waterslide Company issued 29,000, 10-year, 7 percent, $100 bonds on January 1 at face value. Interest is payable each December 31.

1. (a) The issuance of these bonds on January 1.

2. (b) The first interest payment on December 31.

3. Indicate the effects of the amounts for the above transactions. (Enter any decreases to assets, liabilities, or stockholders equity with a minus sign.)

4. Assets		Liabilities		Stockholder Equity

5. 8. Schlitterbahn Waterslide Company issued 29,000, 10-year, 7 percent, $100 bonds on January 1 at face value. Interest is payable each December 31.

6. (a) The issuance of these bonds on January 1.

7. (b) The first interest payment on December 31.

Answer 1

--Requirement [1]

Date	Accounts title	Debit	Credit
01-Jan	Cash (29000 x $ 100)	$2,900,000
	Notes Payable		$2,900,000
	(to record issuance)
31-Dec	Interest Expense ($2900000 x 7%)	$203,000
	Cash		$203,000
	(to record #1 interest payment)

--Requirement [2]

Assets	Liabilities	Stockholder's Equity
Cash $ 2900000	Bonds Payable $ 2900000
Cash $ (203000)		Interest Expense $ (203000)