Question

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Entries for issuing and calling bonds; loss Instructions Chart of Accounts Journal Instructions Adele Corp., a wholesaler of music equipment, issued $32,700,000 of 20-year, 6% callable bonds on March 1, 20Y1, at their face amount, with interest payable on March 1 and September 1. The fiscal year of the company is the calendar year. Journalize the entries to record the following selected transactions. Refer to the Chart of Accounts for exact wording of account bites 2011 1 1 issued the bonds for cash at their face amount Paid the interest on the bonds. Mar. Sept. 2015 Sept. 1 Called the bond issue at 102, the rate provided in the bond Indenture. (Omit entry for payment of interest.)

Answer 1

JOURNAL
	DATE	DESCRIPTION	POST.REF	DEBIT	CREDIT
1	Mar 1,20Y1	Cash	110	$32,700,000
		Bonds Payable	251		$32,700,000
		(to record issue of callable bonds for cash at their face value)
2	Sep 1,20Y1	Interest Expense	710	$981,000
		Cash	110		$981,000
		(to record payment of interest on bonds)
3	Sep 1,20Y5	Bonds Payable	251	$32,700,000
		Loss on Redemption of Bonds	711	$654,000
		Cash	110		$33,354,000
		(to record redemption of callable bonds at the rate provided in bond indenture)