Problem #1

On January 1, 2021, Darnold & Co. issued $12,000,000, 10-year, 8% bonds at 102, with interest payable annually. The straight-line method is used to amortize bond discount. On January 1, 2023, the company redeemed $9,000,000 of these bonds at 101.

A. Prepare the journal entry to record the sale of these bonds on January 1, 2021. B. Prepare the journal entry to record interest expense and bond discount amortization at December 31, 2021. C. Prepare the journal entry to record the redemption of $9,000,000 of the bonds at 101, at January 1, 2023.