Previous Page Next Page 12 of 13 Question 19 ( 2 points) On January 1,2020 , Samwise COmpany issued $$ ¥ 6,000,000,11 \%, 10 $$ year bonds at face value. Interest is payable annually on January1. Prepare the journal entry to record the accrual of interest on December 31,2020 .

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To record the accrual of interest for the bonds issued by Samwise Company on December 31, 2020, we need to calculate the interest expense for the year.

The bond has a face value of $$ ¥ 6,000,000 $$ and an interest rate of $$ 11\% $$. The interest for one year can be calculated as follows:

$$
\text{Interest} = \text{Face Value} \times \text{Interest Rate} = ¥ 6,000,000 \times 11\% = ¥ 660,000
$$

Now, we can prepare the journal entry to record the accrual of interest on December 31, 2020:

**Journal Entry:**

```
Date: December 31, 2020
---------------------------------------
  Interest Expense               ¥ 660,000
      Interest Payable                     ¥ 660,000
---------------------------------------
```

**Explanation:**
- **Interest Expense** is debited to recognize the expense incurred for the year.
- **Interest Payable** is credited to recognize the liability that will be paid in the future.

This entry reflects the accrual of interest that has been incurred but not yet paid as of December 31, 2020.
Journal Entry: ``` Date: December 31, 2020 --------------------------------------- Interest Expense ¥ 660,000 Interest Payable ¥ 660,000 --------------------------------------- ```

Previous Page Next Page 12 of 13 Question 19 ( 2 points) On January 1,2020 , Samwise COmpany issued \( ¥ 6,000,000,11 \%, 10 \) year bonds at face value. Interest is payable annually on January1. Prepare the journal entry to record the accrual of interest on December 31,2020 .

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