Entries for Issuing and Calling Bonds; Loss Rushton Corp., a wholesaler of music equipment, issued $11,800,000 of 25-year, 10% callable bonds on March 1, 2011, at their face amount, with interest payable on March 1 and September 1. The fiscal year of the company is the calendar year. 20V1 Mar. 1 Issued the bonds for cash at their face amount. Sept. 1 Paid the interest on the bonds. 2015 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. Issued the bonds for cash at their face amount. If an amount box does not require an entry, leave it blank. 20V1 Mar. 1 Cash 11,800,000 Bonds Payable 11,800,000 Feedback Check My Work Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. Paid the interest on the bonds. If an amount box does not require an entry, leave it blank. 20V1 Sept. 1 Cash x Feedback Check My Work Interest expense is determined by the formula: Principal x Interest Rate x Time. Called 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. 20V5 Sept. 1 Bonds Payable Loss on Redemption of Bonds Cash 11,800,000 11,800,000 X 11,800,000 X Feedback Check My Work The gain or loss is the balancing amount needed to complete the entry and is the difference between the carrying amount of the bonds and the redemption price. A corporation usually redeems its bonds at a price different from that of the carrying amount of the bonds.