On January 1, 2015 Remington Corp issued $500,000 of 15-year 10% callable bonds payable for $586,460 yielding an effective interest rate of 8%. Interest is payable semiannually on June 30 and December 31.

a. Show computations to confirm the issue price of $586,460.

b. Prepare the journal entries to record the issuance of the bonds on January 1, 2015, the journal entries for both June 30 and December 31 to record the payment of interest.

c. Calculate the carrying value of the bonds as of December 31, 2016.

d. On January 1, 2017 Remington decides to call, or repurchase, all of the bonds at 102. Prepare the journal entry for this transaction.

e. Why would Remington call bonds that still have about 12 years to maturity?