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Apprentice Corporation issued bonds on February 1, 2021 with accrued interest. The bonds are dated January 1, 2021, and mature on January 1, 2026.
Apprentice Corporation issued bonds on February 1, 2021 with accrued interest. The bonds are dated January 1, 2021, and mature on January 1, 2026. The bonds pay interest on an annual basis, on January 1 of each year. The terms of the contract state that the bonds could be redeemed on any date prior to their maturity. Some of the bonds were repurchased and retired by Apprentice Corporation with accrued interest on August 1, 2023. Other information about the bond issue follows: Coupon rate of the bonds Issue price of the bonds Face value of the bonds Bond retirement (repurchase) price Portion of the bond issue that was retired 8% 99 $ 2,460,200 101 18% Apprentice Corporation follows ASPE, uses the straight-line method to account for any bond premiums or discounts, and has a year end of December 31. Required: 1. Prepare the journal entry for the issuance of the bonds on February 1, 2021. (2.5 marks) 2. Prepare any journal entries required on December 31, 2021, January 1, 2022, and December 31, 2022. (7.5 marks) 3. Prepare any journal entries required for the retirement of a portion of the bond issue on August 1, 2023. (8 marks)
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