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Question
Luke Corp. issued $2,000,000 of 9%, 20-year callable bonds on July 1, Year 1, with interest payable on June 30 and December 31. The fiscal year of the company is the calendar year. Journalize the entries for the following selected transactions:
Year 1
July 1 Issued the bonds for cash at their face amount.
Dec. 31 Paid the interest on the bonds.
Year 5
Dec. 31 Called the bond issue at 97, the rate provided in the bond indenture. (Omit entry for payment of interest.)
Answer
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