Question

On October 1, 2021, Novak Corp. issued $840,000, 8%, 10-year bonds at face value. The bonds were dated October 1, 2021, and pay interest annually on October 1. Financial statements are prepared annually on December 31.

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
Oct. 1, 2021	enter an account title for the journal entry on October 1, 2021	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on October 1, 2021	enter a debit amount	enter a credit amount

eTextbook and Media

List of Accounts

  

  

Question Part Score

--/0.33

Prepare the adjusting entry to record the accrual of interest on December 31, 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31, 2021	enter an account title for the adjusting entry on December 31, 2021	enter a debit amount	enter a credit amount
	enter an account title for the adjusting entry on December 31, 2021	enter a debit amount	enter a credit amount

eTextbook and Media

List of Accounts

  

  

Question Part Score

--/0.33

Show the balance sheet presentation of bonds payable and bond interest payable on December 31, 2021.

NOVAK CORP. Balance Sheet (Partial) choose the accounting period                                                                      For the Year Ended December 31, 2021For the Month Ended December 31, 2021December 31, 2021
select an opening name for subsection one                                                                      Current AssetsCurrent LiabilitiesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Stockholders' Equity
enter a balance sheet item			$enter a dollar amount
select an opening name for subsection two                                                                      Current AssetsCurrent LiabilitiesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Stockholders' Equity
enter a balance sheet item			enter a dollar amount

eTextbook and Media

List of Accounts

  

  

Question Part Score

--/0.33

Prepare the journal entry to record the payment of interest on October 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Oct. 1, 2022	enter an account title for the journal entry on October 1, 2022	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on October 1, 2022	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on October 1, 2022	enter a debit amount	enter a credit amount

eTextbook and Media

List of Accounts

  

  

Question Part Score

--/0.33

Prepare the adjusting 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, 2022	enter an account title for the adjusting entry on December 31, 2022	enter a debit amount	enter a credit amount
	enter an account title for the adjusting entry on December 31, 2022	enter a debit amount	enter a credit amount

eTextbook and Media

List of Accounts

  

  

Question Part Score

--/0.34

Assume that on January 1, 2023, Novak pays the accrued bond interest and calls the bonds. The call price is 105. Record the payment of interest and redemption 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, 2023	enter an account title to record the payment of interest on January 1, 2018	enter a debit amount	enter a credit amount
	enter an account title to record the payment of interest on January 1, 2018	enter a debit amount	enter a credit amount
	(To record payment of interest)
Jan. 1, 2023	enter an account title to record the redemption of the bonds on January 1, 2018	enter a debit amount	enter a credit amount
	enter an account title to record the redemption of the bonds on January 1, 2018	enter a debit amount	enter a credit amount
	enter an account title to record the redemption of the bonds on January 1, 2018	enter a debit amount	enter a credit amount
	(To record the redemption of the bonds)

Answer 1

Solution:

Hope this helps! In case of any clarifications, kindly use the comment box below