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Gilbert Corporation has an opportunity to acquire a company which produces one of the parts it uses in its manufacturing process. After careful analysis, Gilbert has decided to raise the necessary capital for the acquisition by issuing $3,000,000 of 7.0%, 10-year bonds dated April 1, 20X6, with interest payments on October 1 and April 1. Assume the bonds are issued on June 1, 20X6, at face value plus accrued interest. Gilbert's year-end is December 31.

a) Prepare the entry to record the issuance of the bonds on June 1, 20X6.

b) Prepare the entry on October 1, 20X6, to record the interest payment.

c) Prepare the entry to record the accrued interest on December 31, 20X6.

d) Prepare the April 1, 20X7, entry to record the interest payment.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9170081

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