Problem
Kershaw electric sold $4,040,000, 14%, 10 year bonds on January 1, 2017. The bonds were dated Jan. 1, 2017 and paid interest on Jan.1 2017. The bonds sold at 96. Prepare the journal entry to record the issurance of the bonds on Jan. 1, 2017.
At December 31, 2017, $7500 of the Discount on Bonds Payable account has been amortized, Show the balance sheet presentation of the long term liability at December 31, 2017.
On January 1, 2019 when the carrying value of the bonds was $3,893,400, the company redeemed the bonds at 105. Record the redemption of the bonds assuming that interest for the period has already been paid.