Prepare the necessary journal entries to record the following transactions relating to the long-term issuance of bonds of Pitts Co.:   March 1 Issued $4,000,000 face value Pitts Co. second mortgage, 8% bonds for $4,360,800, including accrued interest. Interest is payable semiannually on December 1 and June 1 with the bonds maturing 10

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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4. 

Prepare the necessary journal entries to record the following transactions relating to the long-term issuance of bonds of Pitts Co.:

 

March 1

Issued $4,000,000 face value Pitts Co. second mortgage, 8% bonds for $4,360,800, including accrued interest. Interest is payable semiannually on December 1 and June 1 with the bonds maturing 10 years from this past December 1. The bonds are callable at 102.

 

June 1

Paid semiannual interest on Pitts Co. bonds. (Use straight-line amortization of any premium or discount.)

 

December 1

Paid semiannual interest on Pitts Co. bonds and purchased $2,000,000 face value bonds at the call price in accordance with the provisions of the bond indenture.

 

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