Problem
The board of directors of Sigma Health Spa authorizes the issuance of $650,000 of 6%, 10-year bonds payable. The semiannual interest dates are May 31 and November 30. The bonds are issued on July 31, 2010, at par plus accrued interest.
Requirements 1. Journalize the following transactions
a. Issuance of the bonds on July 31, 2010
b. Payment of interest on November 30, 2010
c. Accrual of interest on December 31, 2010
d. Payment of interest on May 31, 2011
2. Report interest payable and bonds payable as they would appear on the Sigma balance sheet at December 31, 2010.