Unformatted text preview: st . Feb. 1 st Issuance of the bonds: Cash 10,000 B/P 10,000 Aug. 1 st Semiannual Interest Payments : Bond Interest Expense 600 Cash 600 Dec. 31 st End of Period Adjusting Entry : Bond Interst Expense 500 Interest Payable 500 Feb. 1 st Next Interest Payment after Adjusting Entry: Interest Expense 100 Interest Payable 500 Cash 600 Maturity Date: Bonds Payable 10,000 Cash 10,000 Bonds Issued In-Between Interest Payment Dates: New bondholder pays for the accrued interest since last interest payment date, allowing the issuer to pay full 6-months interest to each bondholder every interest payment date....
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- Fall '12
- Interest, Generally Accepted Accounting Principles, payment dates, non-interest bearing notes