Answer:
Part B.
Dr Interest expense ($2,000,000 * 8%) $160,000
Cr Interest payable $160,000
Part C.
Dr Interest payable $160,000
Cr Cash $160,000
Explanation:
<u>Part A.</u>
On Jan 1, 2022, the bond issued would be recorded as under:
Dr Cash (2000 bonds * $1000 par value) $2,000,000
Cr Bonds payables $2,000,000
<u>Part B.</u>
On Dec 31, 2022, the interest accrued would be recorded as under:
Dr Interest expense ($2,000,000 * 8%) $160,000
Cr Interest payable $160,000
<u>Part C.</u>
On Jan 1, 2023, the payment of the interest would be recorded as under:
Dr Interest payable $160,000
Cr Cash $160,000
