EX 14-8 Entries for issuing and calling bonds; loss

OBJ.3

Rushton Corp., a wholesaler of music equipment, issued $11,000,000 of 20-year, 9% call-

able 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. Journalize the entries to

record the following selected transactions:

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 101, the rate provided in the bond indenture. (Omit

entry for payment of interest.)