Question

Entries for 1ssuing and Calling Bonds; Gain Year 1, at the Mia Breen Corp. produces and sells wind-energy-driven engines. To fin amount, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year Journalize the entries to record the following selected transactions: Year 1 May 1 Issued the bonds for cash at their face amount. ance its operations, M a Breen Corp. issued $1,487,000 of 25-year, 8% callable bonds on May İ Nov. 1 Paid the interest on the bonds Year 5 Nov. 1 Called the bond issue at 9 Issued the bonds for cash at their face amount. Year 1 May 8, the rate provided in the bond indenture. (Omit entry for payment of interest.) Paid the interest on the bonds. Year 1 Nov1 Called the bond issue at 98, the rate provided in the bond indenture. (Omit entry for payment of interest.) If an amount box does not require an entry, leave it blank Year 5 Nov. 1 Check My Work use

Answer 1

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Solution: Naming convention is not available, can be slightly different: Journal Entries Date Account title and explaination Debit Credit 1487000 Year 1 May.01 Cash Bonds Payable To record the issuance of bonds at face value) 1487000 Nov.01 Interest Expense (1487000*496) 59480 Cash 59480 To record the payment of interest) Year 5 Nov.01 Bonds Payable 1487000 in on retirement of bonds (1487000*2%) Cash To record the retirement of bonds) 29740 1457260