Callable Bonds: Callable bonds are the bonds for which the issuer can make a call to buy back the bonds before its maturity. Bond Issuance: The Company issues the bonds when it needed of long-term debt and for this purpose it calls the public to buy the bond, this whole process is known as bond issuance. Bond Redemption: Bond redemption refers the payment of bonds to its bondholder is made by the issuer. Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts. Accounting rules for journal entries: To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains. To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains. To prepare: The journal entry to make the payment of bond.

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Chapter 15, Problem 15.3AP

(a)

To determine

Callable Bonds: Callable bonds are the bonds for which the issuer can make a call to buy back the bonds before its maturity.

Bond Issuance: The Company issues the bonds when it needed of long-term debt and for this purpose it calls the public to buy the bond, this whole process is known as bond issuance.

Bond Redemption: Bond redemption refers the payment of bonds to its bondholder is made by the issuer.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To prepare: The journal entry to make the payment of bond.

(b)

To determine

To prepare: the journal entry of the redemption of bond.

(c)

To determine

To prepare: the adjustment entry to accrue the interest on bond.

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