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Question
A company issued $1,000,000 of 8%, 30-year callable bonds on April 1, with interest payable on April 1 and October 1. The fiscal year of the company is the calendar year. Journalize the entries for the following selected transactions:
| Year 1 | |
| Apr. 1 | Issued the bonds for cash at their face amount. |
| Oct. 1 | Paid the interest on the bonds. |
| Year 3 | |
| Oct. 1 | Called the bond issue at 104, the rate provided in the bond indenture. (Omit entry for payment of interest.) |
Answer
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