Caruba Company issued $300,000, 6%, 20-year bonds on January 1, 2012, at 103. Interest is payable semiannually on July 1 and January 1. Caruba uses straight-line amortization for bond premium or discount.
Prepare the journal entries to record the following.
| (a) |
|
The issuance of the bonds. |
| (b) |
|
The payment of interest and the premium amortization on July 1, 2012, assuming that interest was not accrued on June 30. |
| (c) |
|
The accrual of interest and the premium amortization on December 31, 2012. |
| (d) |
|
The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded. |