Instructions Adele Corp., a wholesaler of music equipment, issued $29,700,000 of
ID: 2485355 • Letter: I
Question
Instructions Adele Corp., a wholesaler of music equipment, issued $29,700,000 of 20-year, 6% callable bonds on March 1, 2016 at their face amount, with interest payable on March 1 and September 1. The fiscal year of the company is the calendar year. Journalize the entries to record the following selected transactions. Be sure to include the year in the date for the entries recording the issue and calling of the bonds. Refer to the Chart of Accounts for exact wording of account titles. 2016 Issued the bonds for cash at their face amount. Paid the interest on the bonds. Mar. 1 Sept. 1Explanation / Answer
March 01, 2016 Cash A/c Dr 29,700,000
To Bonds Payable 29,700,000
(Being 6% callable amount received on 2,97,000 bonds, issued at a secrities premiun of $ 1 each)
Sept 01,2016 Interest payable Dr 891,000
To Cash 891,000
(Being interest paid on the amount called at 6% for semi annual )
Set 1,2020 Cash A/c Dr 297,000
to Premim on Bonds Payable 297,000