Entries for Issuing and Calling Bonds Gain Emil Corp p oduce

Entries for Issuing and Calling Bonds; Gain Emil Corp, p oduces and sells wind energy- rt en engines. To finance its operations, Emil Corp. issued $363 000 of 10 year, 12% callable bonds on May fiscal year of the company is the calendar year Journalize the entries to record the following selected transactions: 20Y1 May 1 Issued the bonds for cash at their face amount. Nov. 1 Pald the Interest on the bonds. 20YS Nov. 1 Called the bond issue at 96, the rate provided in the bond indenture. 20Y1, at their face a mount. w n est abie 0nMay·an November 1 e (omit entry for payment of Interest.) Issued the bonds for cash at thelr face amount. 20Yl May 1 Pald the Interest on the bonds 20Y1 Nov. Called the bond Issue at 96, the rate provided In the bond Indenture. (Omit entry for payment of Interest.) For a compound transaction, If an amount box does not require an entry, leave It blank. 20YS Nov.

Solution

Note :- Calculation Of interest paid

Face value x Interest rate

$ 363,000 x 12%/2 = $ 21,780

Interest rate is divied by two since interest payment semi annually but 12 % interest rate is given in question is annually.

	Solution
	Journal Entries
Date	Particular	Dr Amount	Cr. Amount
20Y1
May-01	Cash A/c Dr.	$ 363,000
	To Bond Payable A/c		$ 363,000
	(Being Issue of bond at Face value)
Nov-01	Interest Expenses A/c Dr.	$21,780
	To Cash A/c		$ 21,780
	(Being interest on bond paid on 1st nov)
Nov-01	Bond Payable A/c Dr.	$363,000
	To Discount on Bond Payable		$ 14,520
	To Cash A/c		$ 348,480
	(Being called the bond at discount)
	Note :- Calculation Of interest paid Face value x Interest rate $ 363,000 x 12%/2 = $ 21,780 Interest rate is divied by two since interest payment semi annually but 12 % interest rate is given in question is annually.
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