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Record the issuance of the bonds and the payment

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Question

Cupola Fan Corporation issued 8%, $470,000, 10-year bonds for $459,000 on June 30, 2018. Debt issue costs were $2,200. Interest is paid semiannually on December 31 and June 30. One year from the issue date (July 1, 2019), the corporation exercised its call privilege and retired the bonds for $465,000. The corporation uses the straight-line method both to determine interest expense and to amortize debt issue costs.

Required:

1. to 4. record the issuance of the bonds, the payment of interest and amortization of debt issue costs on December 31, 2018 & 2019, and the call of the bonds.

(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Reference no: EM132325667

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