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Bond issued between interest dates? Accounting question?

Oriole Company issues $20300000 of 10-year, 12percent bonds on March 1, 2017 at 97 plus accrued interest. The bonds are dated January 1, 2017, and pay interest on June 30 and December 31.

Can anyone show me how to do the journal entries?

1 Answer

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  • Don G
    Lv 7
    2 years ago

    On March 1:

    DR Cash 20,097,000 DR Bond Discount 609,000

    CR Bonds Payable 20,300,000 CR Accrued Interest 406,000

    On June 30:

    DR Accrued Interest 406,000 DR Interest Expense 812,000

    CR Cash 1,218,000

    On Dec 31:

    Dr Interest Expense 1,218,000 CR Cash 1,218,000

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