On January 1, 2021, a company issues $800,000 of 8% bonds, due in ten years, with interest payable semiannually on June 30 and December 31 each year. Assuming the market interest rate on the issue date is 8%, the bonds will issue at $800,000. Record the bond issue on January 1, 2021, and the first two semiannual interest payments on June 30, 2021, and December 31, 2021.
What will be an ideal response?
| January 1, 2021 | Debit | Credit |
| Cash | 800,000 | ? |
| Bonds Payable | ? | 800,000 |
| (to record the bond issue) | ? | ? |
| June 30, 2021 | ? | ? |
| Interest Expense | 32,000 | ? |
| Cash ($800,000 × 8% × 1/2) | ? | 32,000 |
| (First semiannual interest payment) | ? | ? |
| December 31, 2021 | ? | ? |
| Interest Expense | 32,000 | ? |
| Cash ($800,000 × 8% × 1/2) | ? | 32,000 |
| (Second semiannual interest payment) | ? | ? |
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