Accounting problem?

Question

Doe Company issued $10,000,000 of 30 year, 8% bonds on May 1 and Nov. 1. The fiscal year of the company is the calender year. Journalize the entries to record the following selected transactions for the current year.

May 1 Issued the bonds for cash at their face amount.

Nov. 1 Paid the interest on the bonds

Dec. 31. Recorded accrued interest for two months.

I think I have the right answer, but I want to be sure.

Answer 1

'I think I have the right answer, but I want to be sure.'

Unless you include your entries in the question we can't tell if they are right.

Sorry

Jerry-the-bookkeeper

Answer 2

May 1 Issued the bonds for cash at their face amount

Dr  Cash $10,000,000

Cr  Bonds payable $10,000,000

Nov. 1 Paid the interest on the bonds

Dr  Interest expense $400,000 ($10m x 8% x 6/12)

Cr  Cash $400,000

Dec. 31. Recorded accrued interest for two months

Dr  Interest expense $133,333.33 ($10m x 8% x 2/12)

Cr  Interest payable $133,333.33