Entries for Issuing and CallingBonds; Gain

Robbins Corp. produces and sells wind-energy-driven engines. To finance its operations, Robbins Corp. issued $30,000,000 of 20-year, 10% callable bonds on March 1, 2014, with interest payable on March 1 and September 1. The fiscal year of the company is the calendar year.

Journalize the entries to record the following selected transactions:

2014

mar 1 issue the bonds for cash at their face amount

sept 1 paid the interest on the bonds

2020

sept 1 called the bond issue at 98 the rate provided in the bond

(omit entry for payment of interest)

Issued the bonds for cash at their face amount.

2014 Mar 1. Cash

bonds payable

Paid the interest on the bonds.

2014 sept 1 interest expense

cash

Called the bond issue at 98, 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.

2020 sept 1 bonds payable

gain on redemption of bonds

cash