at their ace amount, with interest payable on March 1 and September 1 Hoover Cor

Question

at their ace amount, with interest payable on March 1 and September 1 Hoover Corp., a wholesaler of music equipment issued $30 000 000 of 20-year 8% callable bonds on March 1 Year company is the calendar year he Cal year or the Dournalize the entries to record the following selected transactions Year 1 Mar. 1 Issued the bonds for cash at their face amount. Sept. 1 Paid the interest on the bonds Year 3 Sept. 1 Called the bond issue at 101.5, the rate provided in the bond indenture. (Omit entry for payment of interest.) Issued the bonds for cash at their face amount. Year 1 Mar. 1 Paid the interest on the bonds Year 1 Sept. 1 Called the bond issue at 101.5, the rate provided in the bond indenture. (Omit entry for payment or interest.) For a compound transaction, if an amount box does not require an entry, leave it blank. Year 3 Sept. 1

Explanation / Answer

Date General Journal Debit ($) Credit ($) Year 1 , Mar 1 Cash 30,000,000 Bonds Payable 30,000,000 Year 1 , Sept 1 Interest Expense [$30,000,000 * 8 % * 6 /12] 1,200,000 Cash 1,200,000 Year 3 , Sept 1 Bonds Payable 30,000,000 Loss on redemption of bonds [$30,000,000 * 1.5 %] 450,000 Cash [$30,000,000 * 101.5 %] 30,450,000

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