On March 1, 20X1, Warner Corporation, a Calendar Year Company

Essay

On March 1, 20X1, Warner Corporation, a calendar year company, issued 40 of its $1,000, 8%, five- year bonds at par. The bonds were dated March 1, 20X1, and the first interest payment will be on February 28, 20X2. The accounting period ends December 31. Part A: Complete the journal entry grid for each of the following dates (round to the nearest dollar) $\begin{array}{|c|c|c|c|c|c|c|}\hline \text { Accounts } & \text { March 1, 20X6 } && \text { December 31, 20X6 } && \text { February 28, 20X7 } \\\hline & \text { Debit } & \text { Credit } & \text { Debit } & \text { Credit } & \text { Debit } & \text { Credit } \\\hline \text { Cash } & & & & & & \\\hline \begin{array}{l}\text { Bonds } \\\text { Payable }\end{array} & & & & & & \\\hline \begin{array}{l}\text { Interest } \\\text { Payable }\end{array} & & & & & & \\\hline \begin{array}{l}\text { Interest } \\\text { Expense }\end{array} & & & & & & \\\hline \begin{array}{l}\text { Other } \\\text { Accounts }\end{array} & & & & & & \\\hline\end{array}$
Part B: Discuss why an entry is needed on December 31, 20X6.