Bonds Issued at a Discount, Redeemed at a Gain

Cline & Co$.$ issued the following bonds at a discount:

Date of issue and sale: April $1,20-1$

Principal amount: $$480,000$

Sale price of bonds: $98$

Denomination of bonds: $$960$

Life of bonds: $20$ years

Stated rate: $7\%,$ payable semiannually on September $30$ and March $31$

Required:

Prepare journal entries for the activities listed below.

Question Content Area

a$.$ Issuance of the bonds.

b$.$ Interest payment and discount amortization on the bonds on September$30,20-1.$

c$.$ Year$-$end adjustment on the bonds for $20-1.$

d$.$ Reversing entry for the beginning of $20-2.$

e$.$ Redemption of $$48,000$ of the bonds on April $1,20-4,$ at $96.$