Question
Prepare the necessary journal entries to record the following transactions relating to the long-term issuance of bonds of Whispering Winds Corp. (Credit account titles are
Prepare the necessary journal entries to record the following transactions relating to the long-term issuance of bonds of Whispering Winds Corp. (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.) March 1 Issued $ 3,920,000 face value Whispering Winds Corp. second mortgage, 8% bonds for $ 4,273,584, including accrued interest. Interest is payable semiannually on December 1 and June 1 with the bonds maturing 10 years from this past December 1. The bonds are callable at 102. June 1 Paid semiannual interest on Whispering Winds Corp. bonds. (Use straight-line amortization of any premium or discount.) December 1 Paid semiannual interest on Whispering Winds Corp. bonds and purchased $ 1,960,000 face value bonds at the call price in accordance with the provisions of the bond indenture. Date Account Titles and Explanation Debit Credit March 1 Cash 4273584 Bonds Payable 3920000 Premium on Bonds Payable Interest Expense June 1 Interest Expense Premium on Bonds Payable Cash December
1 Interest Expense (To record interest on bonds) (To record purchase of bonds)
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