Hoover Corp., a wholesaler of music equipment, issued $7,140,000 of 10-year, 10% callable bonds on March 1, 20Y2, at their face amount, with interest payable on March 1 and September 1. The fiscal year of the company is the calendar year.
20Y2
Mar. 1 Issued the bonds for cash at their face amount.
Sept. 1 Paid the interest on the bonds.
20Y4
Sept. 1 Called the bond issue at 103, the rate provided in the bond indenture. (Omit entry for payment of interest.)
If an amount box does not require an entry, leave it blank.
Journalize the entries to record the above selected transactions.
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Issued the bonds for cash at their face amount.
20Y2 Mar. 1
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Bonds payable is always recorded at face value.
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Paid the interest on the bonds.
20Y2 Sept. 1
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The semiannual cash payment to bondholders is the interest expense when bonds are sold at face value.
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Called the bond issue at 103, the rate provided in the bond indenture. (Omit entry for payment of interest.)
20Y4 Sept. 1
