Reference no: EM132574565

Bryan Company issued $780,000 of 8% face value bonds on January 1, 2016, for $763,800. The bonds are due December 31, 2018, and pay interest semiannually on June 30 and December 31. Bryan uses the straight-line amortization method.

Required:

Question 1: Prepare the journal entries to record the issuance of the bonds and the first two interest payments.

CHART OF ACCOUNTS

Bryan Company

General Ledger

ASSETS

111 Cash

121 Accounts Receivable

141 Inventory

152 Prepaid Insurance

181 Equipment

198 Accumulated Depreciation

LIABILITIES

211 Accounts Payable

231 Salaries Payable

250 Unearned Revenue

255 Bonds Payable

256 Premium on Bonds Payable

257 Discount on Bonds Payable

261 Income Taxes Payable

EQUITY

311 Common Stock

331 Retained Earnings

REVENUE

411 Sales Revenue

EXPENSES

500 Cost of Goods Sold

511 Insurance Expense

512 Utilities Expense

521 Salaries Expense

532 Bad Debt Expense

540 Interest Expense

541 Depreciation Expense

559 Miscellaneous Expenses

910 Income Tax Expense