On October 1, 2021, Novak Corp. issued $840,000, 8%, 10-year bonds at face value. The bonds were dated October 1, 2021, and pay interest annually on October 1. Financial statements are prepared annually on December 31.
(a), (c)-(d)
Your answer is partially correct.
(a) Prepare a tabular summary to record the issuance of the bonds and the adjustments to record the accrual of interest on December 31, 2021.
(c)
Prepare a tabular summary to record the payment of interest on October 1, 2022.
(d) Prepare a tabular summary to record redemption of the bonds on October 1, 2031, their maturity date. (Assume interest has already been recorded and paid.)
Include margin explanations for the changes in revenues and expenses. (If a transaction causes a decrease in Assets, Liabilities or Stochoklers' Equity, place a negative sign (or parentheses) in front of the amount entered for the porticular Asset, Liability or Equity item that was reduced)
Assets
Liabilities
Cash
Bonds. Pay.
Interest Pay.
Pd. in Cap.
Common Stock
Revenue
(a) Oct. 1, 2021
840000
840000
0
Dec. 31, 2021
0
16800
(c) Oct. 1, 2022
-67200
-16800
0
(d) Oct. 1, 2031
(882000)
(840000)
0
Stockholders' Equity
Retained Earnings
Expense
Dividend
-16800
Interest expense
-50400
Premium on bonds
Premium on bonds
