12.00 points On January 1, Innovative Solutions, Inc. issued $120,000 in bonds a

Question

12.00 points On January 1, Innovative Solutions, Inc. issued $120,000 in bonds at face value. The bonds have a stated interest rate of 6 percent. The bonds mature in 10 years and pay interest once per year on December 31. Required 1, 2&3. Complete the required jounal entries to record the bond issuance, interest payment on December 31, early retirement of the bonds. Assume the bonds were retired immediately after the first interest payment at a quoted price of 101 no entry is required for a transaction/event, select "No Journal Entry Required in the first account field.) View transaation list Record the issuance of bonds of $120,000 at face value. 2 Record the interest payment on December 31 Record the retirement of the bonds at a quoted price of 1 3 101. Credit Note : = journal entry has been entered Reoord entry Clear entry iow general journal

Explanation / Answer

1 Cash 120000      Bonds payable 120000 2 Interest expense 7200 =120000*6%        Cash 7200 3 Bonds payable 120000 Loss on redemption of bonds 1200        Cash 121200

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