Entries for issuing and calling bonds; loss Hoover Corp., a wholesaler of music equipment, issued $13,930,000 of 10-year, 10% callable bonds on March 1, 20Y2, at their face amount, with interest payable on March 1 and September 1. The fiscal year of the company is the calendar year. 20Y2 Date Transaction March 1 Issued the bonds for cash at their face amount. September 1 Paid the interest on the bonds. 20Y4 Date Transaction September 1 Called the bond issue at 103, the rate

the bond indenture. (Omit entry for payment of interest.)

If an amount box does not require an entry, leave it blank.

Journalize the entries to record the above selected transactions.

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Issued the bonds for cash at their face amount.

20Y2 Mar. 1	Bonds PayableCashInterest ExpenseInterest PayableLoss on Redemption of BondsCash	Cash	Cash
	Bonds PayableCashInterest ExpenseInterest PayableLoss on Redemption of BondsBonds Payable	Bonds Payable	Bonds Payable

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Bonds payable is always recorded at face value.

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Paid the interest on the bonds.

Date	Account	Debit	Credit
20Y2 Sept. 1	Bonds PayableCashInterest ExpenseInterest PayableLoss on Redemption of BondsInterest Expense	Interest Expense	Interest Expense
	Bonds PayableCashInterest ExpenseInterest PayableLoss on Redemption of BondsCash	Cash	Cash

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The semiannual cash payment to bondholders is the interest expense when bonds are sold at face value.

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Called the bond issue at 103, the rate provided in the bond indenture. (Omit entry for payment of interest.)

Date	Account	Debit	Credit
20Y4 Sept. 1	Accounts PayableBonds PayableCashGain on Redemption of BondsInterest ExpenseBonds Payable	Bonds Payable	Bonds Payable
	Accounts PayableCashGain on Redemption of BondsInterest ExpenseLoss on Redemption of BondsLoss on Redemption of Bonds	Loss on Redemption of Bonds	Loss on Redemption of Bonds
	Accounts PayableCashGain on Redemption of BondsInterest ExpenseLoss on Redemption of BondsCash	Cash	Cash

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