Entries for Issuing and Calling Bonds; Loss

Rushton Corp., a wholesaler of music equipment, issued $6,920,000 of 10-year, 8% callable bonds on March 1, 20Y1, at their face amount, with interest payable on March 1 and September 1. The fiscal year of the company is the calendar year.

20Y1
Mar. 1	Issued the bonds for cash at their face amount.
Sept. 1	Paid the interest on the bonds.
20Y5
Sept. 1	Called the bond issue at 104, 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. If an amount box does not require an entry, leave it blank.

20Y1 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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Paid the interest on the bonds. If an amount box does not require an entry, leave it blank.

20Y1 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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Called the bond issue at 104, 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.

20Y5 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