Question

Entries for Issuing and Calling Bonds; Gain Mia Breen Corp. produces and wind-energy-driven engines. To finance its operations, Mia Breen issued $1,899,000 of 10 year, 10% calable bonds on May 1, 2015, at their face 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 2045 May 1 Issued the bonds for cash at their face amount Nov. 1 Paid the interest on the bonds 2019 Nov. 1 Caled the bond issue at 96, the rate provided in the bond indenture. (Omit entry for payme If an amount box does not require an entry leave it blank. Issued the bonds for cash at their face amount. 2015 May 1 Paid the interest on the bonds. 2015 No. 1 Called the bond issue 95, the rate provided in the bond indenture.com entry for payment of Interest 2049 Nox

Answer 1

Answer
Journal entries:
Date	Accounts title and explanation	Debit $	Credit $
01-May	Cash account Dr.	$ 1,899,000
	Bonds payable account		$ 1,899,000
01-Nov	Interest expense Account Dr.	$       94,950
	Cash account (1,899,000*10%*6/12)		$       94,950
Nov 1 Yr5	Bonds payable Account Dr.	$ 1,899,000
	Cash account		$ 1,823,040
	Gain on redemption of bonds (1,899,000*4%)		$       75,960