On January 1, 2012, Upgrade Co. issued $1,000,000 of 10 percent bonds at face value. These bonds are due in five years with interest payable annually on December 31.
Required:
(A) Provide the joumal entry necessary to recognize the interest expense on December 31, 2012-2016
(B) Provide the jounal entry to record the repayment of the loan principal on December 31, 2016.

Question

On January 1, 2012, Upgrade Co. issued $1,000,000 of 10 percent bonds at face value. These bonds are due in five years with interest payable annually on December 31.
Required:
 (A) Provide the joumal entry necessary to recognize the interest expense on December 31, 2012-2016
(B) Provide the jounal entry to record the repayment of the loan principal on December 31, 2016.

Quizplus · Accepted Answer

The Answer of On January 1, 2012, Upgrade Co. issued $1,000,000 of 10 percent bonds at face value. These bonds are due in five years with interest payable annually on December 31.
Required:
 (A) Provide the joumal entry necessary to recognize the interest expense on December 31, 2012-2016
(B) Provide the jounal entry to record the repayment of the loan principal on December 31, 2016.