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Prepare journal entry to accrue necessary amount of interest

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Problem

Retirement of bonds prior to maturity: Alpha, Inc. issued $100,00 of its 7% five-year bonds on January 1, 20x1, at 101. Interest is paid on January 1 and July 1. The bonds are callable at 105 plus accrued interest and straight line amortization is used. The bonds are recalled on April 1, 20x3.

1.) Prepare the journal entry to record the issuance of the bonds on January 1, 20x1:

2 (a) Prepare the journal entry to accrue the necessary amount of interest for the April 1, 20x retirement:

2 (b) Prepare the journal entry to record the April 1, 20x3 retirement:

Reference no: EM131786296

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