Question

In: Accounting

On August 1, 2017, Indigo Corporation issued $504,000, 8%, 10-year bonds at face value. Interest is...

On August 1, 2017, Indigo Corporation issued $504,000, 8%, 10-year bonds at face value. Interest is payable annually on August 1. Indigo’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.

Cash	=	Bonds Pay.	+	Interest Pay.	+	Common Stock	+	Revenue	-	Expense	-	Dividend

Aug 1 2017 504000(cash) 504000(bonds)

Dec 31 2017 ??????? Need help with this part

Aug 1 2018 -40320 (cash) ???? interest pay and expense ?????? help

Dec 31 2017

Aug 1 2018

Expert Solution

Solution:

Date

Cash

=

Bonds Pay.

+

Interest Pay.

+

Common Stock

+

Revenue

-

Expense

-

Dividend

01-Aug-17

504000

31-Dec-17

16800

01-Aug-18

-40320

-16800

23520

ekkarill92 answered 2 years ago

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