Question

What are the journal entries for the first period (October 1st, December 31st, and June 31st)

A $100,000 note with 8% interest for 4 years. The payments are annuity due and semi-annual. Please provide the correct account titles with the correct amount for each title for the stated dates above.

Answer 1

		It has been assumed that the Bond is being issued on October 1st and Dec 31 is the year end
Date	Account titles and explanation		Debit(in $)	Credit(in $)
Year 1	Oct-01	Cash		100000
		Note Payable			100000
	Dec-31	Interest expenses($100,000*8%*3/12)		2000
		Interest Payable			2000
		(To interest accrued for 3 months)
Year 2	Mar-31	Interest expenses($100,000*8%*3/12)		2000
		Interest Payable			2000
		(To interest accrued for 3 months)