Problem - Headland Co. is building a new hockey arena at a cost of $2,370,000. It received a down payment of $520,000 from local businesses to support the project, and now needs to borrow $1,850,000 to complete the project. It therefore decides to issue $1,850,000 of 10%, 10-year bonds. These bonds were issued on January 1, 2016, and pay interest annually on each January 1. The bonds yield 9%.
Prepare the journal entry to record the issuance of the bonds on January 1, 2016.
Prepare the journal entry to record the issuance of the bonds on January 1, 2016.
Assume that on July 1, 2019, Headland Co. redeems half of the bonds at a cost of $1,019,100 plus accrued interest. Prepare the journal entry to record this redemption.