Question

 

Question: Herrera Corporation issued a $400,000, 4.5%, 10-year bond payable on January 1, 2018. Journalize the payment of the bond

payable at maturity. (Give the date.)

Answer 1

 

Step 1: Definition of bonds

The bond is a type of long-term liability in which the company issues bonds to the general public for a fixed period.

Step 2: Journal entry at maturity of bonds

Date	Particulars	Debit	Credit
January  1, 2028	Bonds Payable	$400,000
	Cash		$400,000
	(Being entry for the payment of the bond at maturity)

 

 

The cash account is credited with $400,000 when the payment of the bonds is made.