Question
In: Finance
On January 1, 2020, Pharoah Company issued $305,500, 6%, 5-year bonds at face value. Interest is...
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Solutions
Expert Solution
| Date | Account Titles and Explanation | Debit ($) | Credit ($) |
| Jan-01-2020 | Cash | 305,500 | |
| Bonds Payable | 305,500 | ||
| [Entry to record the issuance of the bonds] | |||
| Dec-31-2020 | Interest Expense ($305,500 x 6.00%) | 18,330 | |
| Interest Expense Payable | 18,330 | ||
| [Entry to record the accrual of interest on December 31, 2020] | |||
| Jan-01-2021 | Interest Expense Payable | 18,330 | |
| Cash | 18,330 | ||
| [Entry to record the payment of interest on January 1, 2021] | |||
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