Entries for Issuing and Calling Bonds; Loss

Polders Corp., a wholesaler of office equipment, issued $12,700,000 of 20-year, 14% 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.

2014
Mar. 1	Issued the bonds for cash at their face amount.
Sept. 1	Paid the interest on the bonds.
2018
Sept. 1	Called the bond issue at 102, the rate provided in the bond indenture. (Omit entry for payment of interest.)

Journalize the entries to record the above selected transactions.

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Issued the bonds for cash at their face amount.

2014 Mar. 1	Correct 2 of Item 1	Correct 3 of Item 1
	Correct 4 of Item 1	Correct 5 of Item 1

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Paid the interest on the bonds.

2014 Sept. 1	Correct 2 of Item 2	Correct 3 of Item 2
	Correct 4 of Item 2	Correct 5 of Item 2

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Called the bond issue at 102, the rate provided in the bond indenture. (Omit entry for payment of interest.) For a compound transaction, if an amount box does not require an entry, leave it blank.

2018 Sept. 1	Accounts Payable Bonds Payable Cash Discount on Bonds Payable Gain on Redemption of Bonds Interest Expense Correct 2 of Item 3	Correct 3 of Item 3	Correct 4 of Item 3
	Accounts Payable Cash Discount on Bonds Payable Gain on Redemption of Bonds Interest Expense Loss on Redemption of Bonds Correct 5 of Item 3	Correct 6 of Item 3	Correct 7 of Item 3
	Accounts Payable Cash Discount on Bonds Payable Gain on Redemption of Bonds Interest Expense Loss on Redemption of Bonds Correct 8 of Item 3	Correct 9 of Item 3	Correct 10 of Item 3

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Question 4 of 6

Exercise 14-8 (Algorithmic)

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