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Ban Co. purchased 50, $1,000, 5%, Waylan Company bonds on January 1, 2019 for $50,500 cash. Interest is payable annually on January 1. The entry to record the December 31, 2019, interest accrual would include a:_______.

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hyderali230

Answer:

Journal entry to record the December 31, 2019, interest accrual

Dr. Interest Receivable 2,500

Cr. Interest Revenue     2,500

Interest revenue is calculated by multiplying face value of $50,000 (50 x $1,000 ) with coupon rate of 5% as follows

$50,000 x 5% = 2,500

It is accrued and a receivable will be made against an interest income in this event as shown in the journal entry.

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