Chapter 12, Problem 12.8EX

Entries for issuing and calling bonds; loss

Adele Corp., a wholesaler of music equipment, issued $22,000,000 of 20-year, 7% call­able bonds on March 1, 2016 at their face amount, with interest payable on March 1 and September 1. The fiscal year of the company is the calendar year. Journalize the entries to record the following selected transactions:

2016

Mar. 1. Issued the bonds for cash at their face amount.

Sept.l. Paid the interest on the bonds.

2020

Sept.l. Called the bond issue at 102, the rate provided in the bond indenture. (Omit entry for payment of interest.)