Patino Company issued $495,000, 9%, 20-year bonds on January 1, 2011, at 106. Interest is payable semiannually on July 1 and January 1. Patino uses straight-line amortization for bond premium or discount.
Prepare the journal entries to record the following.
- The issuance of the bonds. Date: Jan. 1
- The payment of interest and the premium amortization on July 1, 2011, assuming that interest was not accrued on June 30. DateL: July. 1
- The accrual of interest and the premium amortization on December 31, 2011. Date: Dec. 31
- The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded. Date: Jan.1, 2031