Entries for Issuing and Calling Bonds; Gain

Emil Corp. produces and sells wind$-$energy$-$driven engines. To finance its operations, Emil Corp. issued $$1,354,000$ of $25-$year, $8\%$ callable bonds on May $1,20$Y$1,$ 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:

$20$Y$1$

May $1$ Issued the bonds for cash at their face amount.

Nov. $1$ Paid the interest on the bonds.

$20$Y$5$

Nov. $1$ Called the bond issue at $96,$ the rate provided in the bond indenture. $($Omit entry for payment of interest.$)$

Question Content Area

Issued the bonds for cash at their face amount. If an amount box does not require an entry, leave it blank.

$20$Y$1,$ May $1$

Question Content Area

Paid the interest on the bonds. If an amount box does not require an entry, leave it blank.

$20$Y$1,$ Nov. $1$

Question Content Area

Called the bond issue at $96,$ the rate provided in the bond indenture. $($Omit entry for payment of interest.$)$ If an amount box does not require an entry, leave it blank.

$20$Y$5,$ Nov. $1$