Question
Name of company: cake corp. Effective april 1 , 2023 the company acquired a bond indenture that authorized $1,500,000 of callable, mortgage bonds. Market worth
Name of company: cake corp.
Effective april 1 , 2023 the company acquired a bond indenture that authorized $1,500,000 of callable, mortgage bonds. Market worth stands at $2 million. The bonds yielded interest at a stated rate of eight percent and possessed an anticipated duration of six years. Bondholders were owed interest on September 30th and March 31st every year.
July 1, 2024: cake corp. issued 1,000 of the bonds and received a cash payment in the total amount of $906,000 (which included interest accrued to date).
October 1, 2026: cake corp. called the bonds and paid the current bondholders any interest accrued to date, plus an additional $1,150,000 in cash.
Please document the journal entries ONLY regarding Cake Corp.'s bonds for the period from April 1, 2023, to December 31, 2024, as well as the bonds redeemed on October 1, 2026. Keep in mind that any remaining balance in an unamortized premium or discount account should have been closed when the bonds were redeemed.
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