Make journal entry to record issuance of the bond on july

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Company Alfa issued bonds with a par value of $ 50 million and a nominal interest rate of 5.25%. The bonds pay interest every six months on January 1 and July 1. They were issued on July 1, 2019 and on that date had a duration of 20 years. On the issue date, the market interest rate (yield) was 6.50%. Except that the bonds do NOT pay periodic interest.

Question a. Prepare the journal entry to record the issuance of the bonds on July 1, 2019.

Question b. Prepare the wage entry for July 1, 2021.

Question c. If, with eight years until the bonds mature, the company withdraws them in the amount of $ 33 million, calculate the gain or loss on the withdrawal of the bonds.

Reference no: EM132648486

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