Question

Landmark buys $300,000 of SRW Company's 8%, 5-year bonds payable, at par value on July 1. Interest payments are

made semiannually on December 31 and June 30. The journal entry Landmark should make to record interest earned at

year-end December 31 is:

Answer 1

Answer:

Debit Cash $12,000

Credit Interest Revenue $12,000

Step-by-step explanation:

Based on the information given in a situation where Landmark bought $300,000 of SRW Company's which includes 8% bonds payable which means that if the Interest payments are

made semiannually on December 31 as well as on June 30. The journal entry that Landmark should make to record the interest earned at year-end December 31 is:

Debit Cash $12,000

Credit Interest Revenue $12,000

($300,000*8%*6/12)