Question:
Palmer Corporation issued 3,000 7%, 5-year, $1,000 bonds dated January 1, 2012, at face value. Interest is paid each January 1.
(a) Prepare the journal entry to record the sale of these bonds on January 1, 2012.
(b) Prepare the adjusting journal entry on December 31, 2012, to record interest expense.
(c) Prepare the journal entry on January 1, 2013, to record interest paid.
Hanrahan Corporation issued $400,000 of 10-year bonds at a discount. Prior to maturity, when the carrying value of the bonds was $388,000, the company retired the bonds at 99.
Prepare the entry to record the redemption of the bonds.