Adele Corp., a wholesaler of music equipment, issued $22,000,000 of 20-year, 7% callable bonds on March 1, 20Y1, 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:20Y1Mar. 1. Issued the bonds for cash at their face amount.Sept. 1. Paid the interest on the bonds.20Y5Sept. 1. Called the bond issue at 102, the rate provided in the bond indenture.(Omit entry for payment of interest.)

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Asked Dec 19, 2019
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Adele Corp., a wholesaler of music equipment, issued $22,000,000 of 20-year, 7% callable bonds on March 1, 20Y1, 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:
20Y1
Mar. 1. Issued the bonds for cash at their face amount.
Sept. 1. Paid the interest on the bonds.
20Y5
Sept. 1. Called the bond issue at 102, the rate provided in the bond indenture.
(Omit entry for payment of interest.)

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Expert Answer

Step 1

Prepare the journal entry to record the issuance of bonds at face amount on March 1.

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Accounts title and explanation Debit ($) Credit ($) Date March 01, Cash Bonds payable |(To record the issuance of bonds payable at face value) $ 22,000,000 20Υ1 S 22,000,000

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Step 2

Prepare the journal entry to record the interes...

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Debit (S) Accounts title and explanation Credit (S) Date September 01, 20Y1 Interest expense (22,000,000×7%x6/12) $ 770,000 $ 770,000 Cash |(To record the payment of semi-anmual interest)

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