Emil Corp. produces and sells wind-energy-driven engines. To finance its operations, Emil Corp. issued $15,000,000 of 20-year, 9% callable bonds on May 1, 20Y1, at their face amount, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year. Journalize the entries to record the following selected transactions:20Y1May 1. Issued the bonds for cash at their face amount.Nov. 1. Paid the interest on the bonds.20Y5Nov. 1. Called the bond issue at 96, 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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Emil Corp. produces and sells wind-energy-driven engines. To finance its operations, Emil Corp. issued $15,000,000 of 20-year, 9% callable bonds on May 1, 20Y1, at their face amount, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year. Journalize the entries to record the following selected transactions:
20Y1
May 1. Issued the bonds for cash at their face amount.
Nov. 1. Paid the interest on the bonds.
20Y5
Nov. 1. Called the bond issue at 96, the rate provided in the bond indenture.
(Omit entry for payment of interest.)

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Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations. Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lenders known as bondholders, generally in multiples of $1,000 per bond, to raise fund for financing the operations.

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Prepare journal entry for issuance of bonds at face amount on May 1. Post Accounts and Explanation Credit ($) Debit ($) Date Ref May 1, 20Υ1 Cash 15,000,000 Bonds Payable 15,000,000 (To record the issuance of bonds payable at face value)

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Working note: Interest expense = Bonds payable x interest rate x Time periods %3D 6. 12 = $15,000,000 x 9% × (1) = $675,000

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