On August 1, 2017, Blue Spruce Corp. issued $507,600, 6%, 10-year bonds at face value. Interest...

On August 1, 2017, Blue Spruce Corp. issued $507,600, 6%, 10-year bonds at face value. Interest is payable annually on August 1. Blue Spruce’s year-end is December 31.

Prepare a tabular summary to record the following events.

(a)		The issuance of the bonds.
(b)		The accrual of interest on December 31, 2017.
(c)		The payment of interest on August 1, 2018.

Solutions

Expert Solution

	Assets	=	Liabilities		+	Shareholders' equity
	Cash		Bonds payable	Interest payable		Revenue	Expense
(a)	507,600		507,600
(b)				12,690			12,690
				(507,6006%5/12)
(c )	(30,456)			(12,690)			17,766
							(5076007/126%)

ekkarill92 answered 1 year ago

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