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On Jan 1, 2020, Baez Corporation issues 3-year bonds with a face value of $7,500,000 and a stated annual interest rate of 4%. Interest is
- On Jan 1, 2020, Baez Corporation issues 3-year bonds with a face value of $7,500,000 and a stated annual interest rate of 4%. Interest is payable semiannually on June 30 and Dec 31. The annual market rate of interest is 6%, and the company receives cash proceeds of $7,093,711 when the bonds are issued.
- Provide the journal entry that Baez will make to record the bond issue on 1/1/20.
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- Provide the journal entry that Baez will make on 12/31/20 to record the second bond interest payment.
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- Provide the journal entry that Baez will make if they decide to retire the bonds early on 1/1/21. Assume the bond buyback price is 101.
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