On June 30, Police Company issues 6 %, 10-year bonds payable with at face value of $ 100 comma 000. The bonds are issued at face value and pay interest on June 30 and December 31. Requirements 1. Journalize the issuance of the bonds on June 30. 2. Journalize the semiannual interest payment on December 31.

The journal entry upon issuance of the bond is as follows:

Dr Cash             $100,000

Cr Bonds payable                 $100,000

to record issuance of bond for cash

Journal entry for semi-annual interest

Dr Interest expense       $6000

Cr Cash                                       $6000

Being payment of bond semi-annual interest

Explanation:

Upon issuance of the bond with face value and issue price of $100,000, the cash position of the Police company increases by $100,000, hence the cash account should receive a debit of $100,000, but the issue also implies increased debt obligation, as a result , the bonds payable account is also credited with the same amount.

Concerning, the interest payment, which is an outflow of cash, the cash account is credited and the interest expense account is debited as an increase in expense.

The amount of interest is $6000(6%*$100,000).

answertrue;

two years ago, when picking flowers in the mountains back of yosemite valley, i found a book. it was blotted and storm-beaten; all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however; many of the inner pages were well preserved. and although all were more or less stained and torn, whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today; its granite pages have been torn and blurred by the same storms that wasted the castaway book.

two years ago, when picking flowers in the mountains back of yosemite valley; i found a book. it was blotted and storm-beaten, all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however, many of the inner pages were well preserved. and although all were more or less stained and torn; whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today, its granite pages have been torn and blurred by the same storms that wasted the castaway book.