Question

# On January 1, 2019, Metlock, Inc. issued \$554,500, 14%, 10-year bonds at face value. Interest is...

On January 1, 2019, Metlock, Inc. issued \$554,500, 14%, 10-year bonds at face value. Interest is payable annually on January 1.

(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 Jan. 1

(b)

Prepare the journal entry to record the accrual of interest on December 31, 2019. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

 Date Account Titles and Explanation Debit Credit Dec. 31

(c)

Prepare the journal entry to record the payment of interest on January 1, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

 Date Account Titles and Explanation Debit Credit Jan. 1

 Answer Date Account Titles and Explanation Debit Credit 01-Jan-19 Cash \$ 5,54,500 14% Bond payable \$ 5,54,500 (To record the issuance of the bonds) 31-Dec-19 Interest Exp (\$ 5,54,500 * 14%) \$ 77,630 Interest Payable \$ 77,630 (To record the accrual of interest at 14% on \$ 5,54,500) 01-Jan-20 Interest Payable \$ 77,630 Cash \$ 77,630 (To record the payment of interest ) Please Like !!!

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