Dechow, Inc., issued $250,000 of 8%, 15-year bonds at 96 on July 1, 2012. Interest is payable semiannually on December 31 and June 30. Through June 30, 2019, Dechow amortized $3,186 of the bond discount. On July 1, 2019 Dechow retired the bonds at 101.

Required a. Prepare journal entries to record the issue and retirement of these bonds. (Assume the June interest expense has already been recorded.)

General Journal
Date	Description	Debit	Credit
07/01/12	Cash	Answer	Answer
	AnswerCashBonds payableBond discountGain on retirement of bondsLoss on retirement of bonds	Answer	Answer
	AnswerCashBonds payableBond discountGain on retirement of bondsLoss on retirement of bonds	Answer	Answer
07/01/19	Bonds payable	Answer	Answer
	AnswerCashBonds payableBond discountGain on retirement of bondsLoss on retirement of bonds	Answer	Answer
	AnswerCashBonds payableBond discountGain on retirement of bondsLoss on retirement of bonds	Answer	Answer
	Cash	Answer	Answer

b. Post the journal entries from part a to their respective T-accounts.

Cash (A)
07/01/12	Answer	Answer
07/01/19	Answer	Answer

Bonds Payable (L)
07/01/12	Answer	Answer
07/01/19	Answer	Answer

Loss on Retirement of Bonds (E)
07/01/12	Answer	Answer
07/01/19	Answer	Answer

Bond Discount (XL)
07/01/12	Answer	Answer
07/01/19	Answer	Answer

c. Record each of the transactions from part a in the financial statement effects template. Remember to use negative signs, when appropriate.

	Balance Sheet										Income Statement
Transaction	Cash Asset	+	Noncash Asset	=	Liabilities	+	Contra-Liabilities	+	Contrib. Capital	+	Earned Capital	Revenues	-	Expenses	=	Net Income
7/1/12 Issue bonds at a discount	Answer	+	Answer	=	Answer	+	Answer	+	Answer	+	Answer	Answer	-	Answer	=	Answer
7/1/19 Retire bonds Issued on 7/1/12	Answer	+	Answer	=	Answer	+	Answer	+	Answer	+	Answer	Answer	-	Answer	=	Answer