Farrar Corp., a wholesaler of office furniture, issued $7,000,00 of 20 year, 9% callable bonds on April 1, 2008, with interest payable on April 1 and October 1. The fiscal year of the company is the calendar year.

2008
Apr 1 Issued the bonds for cash at their face amount.
Oct 1 Paid the interest on the bonds.

2012
Oct 1 Called the bond issue at 103, the rate provided in the bond indenture. (Omit entry for payment of interest.)

Journalize the entries to record the transactions. For a compound transaction, accounts should be listed largest to smallest.

Farrar Corp., a wholesaler of office furniture, issued $7,000,00 of 20 year, 9% callable bonds on April 1, 2008, with interest payable on April 1 and October 1. The fiscal year of the company is the calendar year.

2008
Apr 1 Issued the bonds for cash at their face amount.
Oct 1 Paid the interest on the bonds.

2012
Oct 1 Called the bond issue at 103, the rate provided in the bond indenture. (Omit entry for payment of interest.)

Journalize the entries to record the transactions. For a compound transaction, accounts should be listed largest to smallest.



1/04/08
Dr Cash/Bank 7,000,000
Cr Corporate bonds/Loan 7,000,000

1/10/08
Dr Interest Expense 315,000
Cr Cash/Accounting payable 315,000

Not 100% on the last bit but

1/10/12
Dr Corporate bonds/Loan 7,000,000
Dr Loan expense (not sure on name) 210,000
Cr Cash/Bank 7,210,000