Entries for Issuing and Calling Bonds; Gain
Vidovich Corp. produces and sells renewable energy equipment. To finance its operations, Vidovich Corp. issued $425,000 of 25-year, 8% callable bonds on January 1, 2012, with interest payable on January 1 and July 1. The fiscal year of the company is the calendar year.
Journalize the entries to record the following selected transactions:
2012
Jan. 1 Issued the bonds for cash at their face amount.
July. 1 Paid the interest on the bonds.
2018
July. 1 Called the bond issue at 97, the rate provided in the bond indenture. (Omit entry for payment of interest.)
Issued the bonds for cash at their face amount.
Paid the interest on the bonds.
Called the bond issue at 97, 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.