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Preject a interest Pryable In onder to finance the opening of the store, Fido's Food...

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Accounting

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Preject a interest Pryable In onder to finance the opening of the store, Fido's Food Mart issued $12,000 of bonds that pay 10% interest annually. Interest is paid January 31 for interest that accrued during the prior year Bonds were issued at face value on September 1. Required: 1. Calculate the interest payable to the bond holders from September 1 to December 31 2. Record the adjusting journal entry for the interest payble. a. Show the balancing effects on the accounting equation b. Record the adjusting journal entry in two-line format using a debit and a credit c. Show T-accounts with beginning balances, transactions, and end balances 3. Prepare a new adjusted trial balance and highlight the accounts and amounts changed TIME = MONEY Formula Interest Principal x Rate x Time Formula example Principal 15,000 Annual Rate of Interest 8 % Time (One Year) Interest Principal Rate Time One Full Year 15,000 S% 1200 1 One-Half Year 15,000 600 8% 1/2 Quarter Year 300 15,000 8% 1/4 Two Months 200 15,000 8% 1/6 100 One Month 15,000 8% 1/12

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