Entries for issuing and calling bonds; gain

Mia Breen Corp. produces and sells wind-energy-driven engines. To finance its operations, Mia Breen issued $415,000 of 20-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:

Date	Transaction
May 1	Issued the bonds for cash at their face amount.
November 1	Paid the interest on the bonds.

Date	Transaction
November 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.

Question Content Area

Issued the bonds for cash at their face amount.

Date	Account	Debit	Credit
20Y5 May 1	Accounts PayableBonds PayableCashInterest ExpenseLoss on Redemption of BondsCash
	Accounts PayableBonds PayableCashInterest ExpenseLoss on Redemption of BondsBonds Payable

Question Content Area

Paid the interest on the bonds.

Date	Account	Debit	Credit
20Y5 Nov. 1	Bonds PayableCashInterest ExpenseInterest PayableLoss on Redemption of BondsInterest Expense
	Accounts PayableBonds PayableCashInterest ExpenseLoss on Redemption of BondsCash

Question Content Area

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

Date	Account	Debit	Credit
20Y9 Nov. 1	Accounts PayableBonds PayableCashGain on Redemption of BondsLoss on Redemption of BondsBonds Payable
	Accounts PayableBonds PayableGain on Redemption of BondsInterest PayableLoss on Redemption of BondsGain on Redemption of Bonds
	Accounts PayableBonds PayableCashInterest ExpenseLoss on Redemption of BondsCash