Question
Adele Corp., a wholesaler of music equipment, issued $33,100,000 of 20-year, 4% callable bonds on March 1, 20Y1, at their face amount, with interest payable
Adele Corp., a wholesaler of music equipment, issued $33,100,000 of 20-year, 4% callable bonds on March 1, 20Y1, 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. Refer to the Chart of Accounts for exact wording of account titles.
20Y1
Mar.1. Issued the bonds for cash at their face amount.
Sept.1. Paid the interest on the bonds.
20Y5
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.General Ledger
ASSETS
110 Cash
111 Petty Cash
121 Accounts Receivable
122 Allowance for Doubtful Accounts
126 Interest Receivable
127 Notes Receivable
131 Merchandise Inventory
141 Office Supplies
142 Store Supplies
151 Prepaid Insurance
191 Land
192 Store Equipment
193 Accumulated Depreciation-Store Equipment
194 Office Equipment
195 Accumulated Depreciation-Office Equipment
LIABILITIES
210 Accounts Payable
221 Salaries Payable
231 Sales Tax Payable
232 Interest Payable
241 Notes Payable
251 Bonds Payable
252 Discount on Bonds Payable
253 Premium on Bonds Payable
EQUITY
311 Common Stock
312 Paid-In Capital in Excess of Par-Common Stock
315 Treasury Stock
321 Preferred Stock
322 Paid-In Capital in Excess of Par-Preferred Stock
331 Paid-In Capital from Sale of Treasury Stock
340 Retained Earnings
351 Cash Dividends
352 Stock Dividends
390 Income Summary
REVENUE
410 Sales
610 Interest Revenue
611 Gain on Redemption of Bonds
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