Question - Helton Company sold $500,000 in long-term bonds. The bonds will mature in 8 years and have a stated interest rate of 8% and a yield rate of 6%. The bonds pay interest annually on January 1 of each year. The bonds are accounted for under the effective-interest method. Round all calculations to the nearest dollar.
Required:
(a) Calculate the selling price of the bonds.
(b) Provide entries for the sale of the bonds and any entries necessary at December 31, 2007.
(c) On June 1, 2008 Helton redeems early 30% of the bonds for $170,000 including accrued interest. Give all entries related to the early redemption.