Xonic Corporation issued $9.0 million of 20-year, 8 percent bonds on April 1, 20

Question

Xonic Corporation issued $9.0 million of 20-year, 8 percent bonds on April 1, 2018, at 102. Interest is due on March 31 and September 30 of each year, and all of the bonds in the issue mature on March 31, 2038. Xonic’s fiscal year ends on December 31. a-c. Record the issuance of the bonds and entries after the issue. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in dollars.) Record the following on a General Ledger: April 1, 2018- Record the issuance of bonds September 30, 2018- Record the bonds interest and amortize bond premium. March 31, 2038- Record the final interest payment and amortize bond premium. March 31, 2038- Record the retirement of the bonds.

Explanation / Answer

Date Particulars Debit Credit 1-Apr-18 Cash 9.18 Premium on Bonds Payable 0.18 Bonds Payable 9 30-Sep-18 Bond Interest Expense (.36-.0045) 0.3555 Premium on Bonds Payable 0.0045 Cash 0.36 31-Mar-38 Bond Interest Expense (.36-.0045) 0.3555 Premium on Bonds Payable 0.0045 Cash 0.36 31-Mar-38 Bonds Payable 9 Cash 9

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