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Verrecchia Inc., has a fiscal year end on 12/31/2018. Verrecchia is authorized to issue $800,000 of 9%, 5-year bonds dates April 1, 2019. These bonds

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Verrecchia Inc., has a fiscal year end on 12/31/2018. Verrecchia is authorized to issue $800,000 of 9%, 5-year bonds dates April 1, 2019. These bonds pay interest is paid each April 1 and Oct 1. The bonds can be called (i.e., repurchaed by the issuer) after April 1, 2020 at a price of 104. Requirements Assume these bonds were sold on April 1, 2019, when the market interest rate was 8%. Record the necessary journal entries to: 1) Record the issuance of the bonds on April 1, 2019 2) Record the interest expense in the income statement in 2019. Note, firm reports on a quarterly basis and the dates on which the interest is paid (the case paid) do no coincide with the end of the fiscal quarters. 3) Record the repurchase of the bonds if they are called back at the close of business on April 2, 2020 at 104. 4) In part (3), where will the gain/loss on this transaction be reported in the Q2 2020 income statement

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