Practice Exercise 14-3 On September 30, 2012, Pharoah Company issued 10% bonds with a par value of $480,000 due in 20 years. They were issued at 98 and were callable at 103 at any date after September 30, 2017. Because Pharoah Company was able to obtain financing at lower rates, it decided to call the entire issue on September 30, 2018, and to issue new bonds. New 8% bonds were sold in the amount of $790,000 at 103; they mature in 20 years. Pharoah Company uses straight-line amortization. Interest payment dates are March 31 and September 30 Your answer is partially correct. Try again. Prepare journal entries to record the redemption of the old issue and the sale of the new issue on September 30, 2018. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit Bonds Payable 480,000 Loss on Redemption of Bonds 17760 Discount on Bonds Payable 3360 Cash 494,400 Your answer is partially correct. Try again. Prepare the entry required on December 31, 2018, to accrue interest and amortize the premium on the bonds. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Interest Expense Debit Credit 30810 Premium on Bonds Payable 790 Interest Payable 31600 Click if you would like to Show Work for this question: Qpen Show Work