Problemtruax co issued 250000 of 6 percent 10 year callable, Ask an Expert

Accounting

Problem:

Truax Co. issued $250,000 of 6 percent, 10 year, callable bonds on January 1, 2013, at their face value. The call premium was 2 percent (bonds are callable at 102). Interest was payable annually on December 31. The bonds were called on December 31, 2016.

Required

Question 1: Prepare the journal entries to record the bond issue on January 1, 2013, and the bond redemption on December 31, 2016. Assume that all entries to accrue and pay interest were recorded correctly.

Note: Please show the work not just the answer.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91164558

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