Entries for Issuing and CallingBonds; Gain

Emil Corp. produces and sells wind-energy-driven engines. To finance its operations, Emil Corp. issued $1,830,000 of 10-year, 10% callable bonds on May 1, 20Y1, at their face amount, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year.

Journalize the entries to record the following selected transactions:

Issued the bonds for cash at their face amount.

20Y1, May 1

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Paid the interest on the bonds.

20Y1, Nov. 1

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Called the bond issue at 95, the rate provided in thebond indenture. (Omit entry for payment of interest.) For a compound transaction, if an amount box does not require an entry, leave it blank.

20Y5, Nov. 1

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