PA10-6 (Supplement 10A) Recording Bond Issue, Interest Payments (Straight-Line Amortization), and Early Bond Retirement [LO 10-S1]

On January 1, 2012, Loop Raceway issued 700 bonds, each with a face value of $1,000, a stated interest rate of 6% paid annually on December 31, and a maturity date of December 31, 2014. On the issue date, the market interest rate was 7 percent, so the total proceeds from the bond issue were $681,631. Loop uses the straight-line bond amortization method and adjusts for any rounding errors

Complete the required journal entries to record the bond issue, interest payments on December 31, 2012 and 2013, bond retirement. Assume the bonds are retired on January 1, 2014, at a 5. price of 97. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Complete the required journal entries to record the bond issue, interest payments on December 31, 2012 and 2013, bond retirement. Assume the bonds are retired on January 1, 2014, at a 5. price of 97. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)