Entries for Issuing and Calling Bonds; Gain

Mia Breen Corp. produces and sells wind-energy-driven engines. To finance its operations, Mia Breen issued $1,296,000 of 15-year, 13% callable bonds on May 1, 20Y5, 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:

20Y5
May 1	Issued the bonds for cash at their face amount.
Nov. 1	Paid the interest on the bonds.
20Y9
Nov. 1	Called the bond issue at 97, 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.

Issued the bonds for cash at their face amount.

20Y5 May 1

Paid the interest on the bonds.

20Y5 Nov. 1

Called the bond issue at 97, the rate provided in the bond indenture. (Omit entry for payment of interest.)

20Y9 Nov. 1