Entries for Issuing and Calling Bonds; Loss

Hoover Corp., a wholesaler of music equipment, issued $9,460,000 of 10-year, 14% 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

Mar. 1Issued the bonds for cash at their face amount.

Sept. 1Paid the interest on the bonds.

20Y4

Sept. 1Called the bond issue at 102, 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.

Journalize the entries to record the above selected transactions.

Issued the bonds for cash at their face amount.

20Y2 Mar. 1

Paid the interest on the bonds.

20Y2 Sept. 1

Called the bond issue at 102, the rate provided in the bond indenture. (Omit entry for payment of interest.)

20Y4 Sept. 1