Entries for Issuing and Calling Bonds; Gain
Emil Corp. produces
and sells wind-energy-driven engines. To finance its operations, Emil Corp. issued $1,830,000 of 10-year, 10% callable bonds on May 1, 20Y1, 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:
Issued the bonds for cash at their face amount.
20Y1, May 1
Paid the interest on the bonds.
20Y1, Nov. 1
Called the bond issue at 95, the rate provided in the bond indenture. (Omit entry for payment of interest.) For a compound transaction, if an amount box does not require an entry, leave it blank.
20Y5, Nov. 1