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On October 1, 2016, Concord Corp. issued $924,000, 7%, 10-year bonds at face value. The bonds were dated October 1, 2016, and pay interest annually on October 1. Financial statements are prepared annually on December 31.

Prepare a tabular summary to record the issuance of the bonds and the adjustments to record the accrual of interest on December 31, 2016.

Answer :

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Answer:

Tabular summary is attached with this answer in MS EXCEL file.

Explanation:

The journal Entries for the Transactions are as follow

                                                                         Dr.               Cr.

October 1, 2016           Cash                      $924,000

                                    Bond Payable                          $924,000

December 31 , 2016    Interest Expense  $16,170

                                    Interest Payable                       $16,170

Interest Expense = $924,000 x 7% x 3/12 = $16,170

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