The Case Corporation issued $600,000 of 13% bonds on January 1, 2006 for $636,000. The bonds are

Question:

The Case Corporation issued $600,000 of 13% bonds on January 1, 2006 for $636,000. The bonds are payable in three annual $200,000 installments beginning December 31, 2007, pay interest semiannually on June 30 and December 31, and are callable at 107. On January 1, 2008 the bonds due December 31, 2009 are recalled at the call price. The corporation uses the bonds outstanding method of amortization.

Required

Prepare a serial bond premium amortization schedule and the journal entries to record the bond issue, payment of interest, and bond retirement on each of the following dates:

1. January 1, 2006

2. December 31, 2006

3. December 31, 2007

4. January 1, 2008

5. December 31, 2008

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...