On May 1, 2012, Chance Corp. issued $319,800, 7%, 5-year bonds at face value. The bonds were dated May 1, 2012, and pay interest semiannually on May 1 and November 1. Financial statements are prepared annually on December 31. (a) Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit May 1, 2012 (b) Prepare the adjusting entry to record the accrual of interest on December 31, 2012. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31, 2012 (c) Show the balance sheet presentation on December 31, 2012.
Chance Corp. Balance Sheet December 31, 2012 $ $ (d) Prepare the journal entry to record payment of interest on May 1, 2013, assuming no accrual of interest from January 1, 2013, to May 1, 2013. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit May 1, 2013 (e) Prepare the journal entry to record payment of interest on November 1, 2013. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Nov. 1, 2013 (f) Assume that on November 1, 2013, Chance calls the bonds at 104. Record the redemption of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Nov. 1, 2013