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On May 1, 2017, Herron Corp. issued $500,000, 5%, 5-year bonds at face value. The bonds were dated May 1, 2017, and pay interest annually on May 1. Financial statements are prepared annually on December 31.
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Show the balance sheet presentation on December 31, 2017. (Enter account name only and do not provide descriptive information. Round answers to 0 decimal places, e.g. 5,675.)
Herron Corp.
Balance Sheet (Partial)
current liabilities
Entry field with correct answer
Entry field with incorrect answer $
long term liabilities
Entry field with incorrect answer $
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Prepare the journal entry to record payment of interest on May 1, 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,675.)
Date
Account Titles and Explanation
Debit
Credit
May 1, 2018
Interest Expense debit ?
Interest Payable debit 16,667
Cash credit ?
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Assume that on January 1, 2019, Herron pays the accrual bond interest and calls the bonds. The call price is 101. Record the payment of interest and redemption of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,675.)
Date
Account Titles and Explanation
Debit
Credit
Jan. 1, 2019
Interest Payable debit ?
Cash credit ?
(To record payment of interest)
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