Question - Martha Corporation issued $800,000 of 12% bonds on April 1, 2016 for $851,705.70. The bonds are due March 31, 2020, were issued to yield 10%, and pay interest semiannually on September 30 and March 31. Martha Corporation uses the effective interest method.
Required:
1. Prepare a bond a bond interest expense and premium amortization schedule.
2. Assume the company retired the bonds on June 30, 2017, for $848,000, which includes accrued interest. Prepare the journal entries to record the bond retirement.