On January 1, 2014, Buer Company issued 500 10 year bonds with $1,000 face value for each bond at 102. Interest is payable on January 1 and July 1 at 10%. On April 1, 2015, Buer Company reacquires and retires 50 of its own $1,000 bonds at 98 plus accrued interest. The fiscal period for Buer Company is the calendar year.

Required:

Prepare entries to record A) The issuance of the bonds, B) the interest payments and adjustments relating to the debt in 2014, and C) the reacquisition and retirement of bonds in 2015. Assume the premium or discount is amortized on a straight line basis.

Debit

Credit

A) Issuance of the bonds

1/1/2014

B) Interest payments during 2014

6/30/2014

12/31/2014

C) Reacquisition of the bonds in 2015

4/1/2015