Adele Corp., a wholesaler of music equipment, issued $22,000,000 of 20-year, 7% callable bonds on March 1, 2016 at their face amount, with interest payable on March 1 and September 1. The fiscal year of the company is the calendar year.

Journalize the entries to record the following selected transactions. Be sure to include the year in the date for the entries recording the issue and calling of the bonds. Refer to the Chart of Accounts for exact wording of account titles.

2016

Mar. 1.Issued the bonds for cash at their face amount.

Sept. 1.Paid the interest on the bonds.

2020

Sept. 1.Called the bond issue at 102, the rate provided in the bond indenture. (Omit entry for payment of interest.)

CHART OF ACCOUNTS

Adele Corp.

ASSETS

110Cash

111Petty Cash

121Accounts Receivable

122Allowance for Doubtful Accounts

126Interest Receivable

127Notes Receivable

131Merchandise Inventory

141Office Supplies

142Store Supplies

151Prepaid Insurance

191Land

192Store Equipment

193Accumulated Depreciation-Store Equipment

194Office Equipment

195Accumulated Depreciation-Office Equipment

LIABILITIES

210Accounts Payable

221Salaries Payable

231Sales Tax Payable

232Interest Payable

241Notes Payable

251Bonds Payable

252Discount on Bonds Payable

253Premium on Bonds Payable

EQUITY

311Common Stock

312Paid-In Capital in Excess of Par-Common Stock

315Treasury Stock

321Preferred Stock

322Paid-In Capital in Excess of Par-Preferred Stock

331Paid-In Capital from Sale of Treasury Stock

340Retained Earnings

351Cash Dividends

352Stock Dividends

390Income Summary

REVENUE

410Sales

610Interest Revenue

611Gain on Redemption of Bonds

EXPENSES

510Cost of Merchandise Sold

515Credit Card Expense

516Cash Short and Over

521Sales Salaries Expense

522Office Salaries Expense

531Advertising Expense

532Delivery Expense

533Repairs Expense

534Selling Expenses

535Rent Expense

536Insurance Expense

537Office Supplies Expense

538Store Supplies Expense

541Bad Debt Expense

561Depreciation Expense-Store Equipment

562Depreciation Expense-Office Equipment

590Miscellaneous Expense

710Interest Expense

711Loss on Redemption of Bonds