Question

Blossom Company issued $579,000 of 9%, 10-year bonds on January 1, 2020, at face value. Interest is payable annually on January 1.

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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
Jan. 1, 2020

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Prepare the journal entry to record the accrual of interest on December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31, 2020
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Prepare the journal entry to record the payment of interest on January 1, 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 1, 2021
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Prepare the journal entry to record the redemption of bonds at maturity, assuming interest for the last interest period has been paid and recorded. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 1, 2027

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Answer 1

Date	Account Titles	Debit	Credit
Jan. 1	Cash	$          579,000
2020	Bonds Payable		$            579,000
	(Issue of Bonds)
Dec. 31	Interest Expense	$            52,110
2020	Interest Payable		$              52,110
	(Accrual of interest)
Jan. 1	Interest Payable	$            52,110
2021	Cash		$              52,110
	(Payment of interest)
Jan. 1	Bonds Payable	$          579,000
2027	Cash		$            579,000
	(Redemption of bonds)