Entry for semiannual interest and purchase of bonds at call price
Can you combine an entry for paying semiannual interest and purchasing face value bonds?
On March 1, Titus Co issued $800,000 face value second mortgage, 8% bonds for $872,160 including accrued interest, Interest is paid semiannually on Dec 1 and June 1 with the bonds maturing 10 years from this past Dec 1. The bonds are callable at 102.
Entry March 1
Cash $872,160
Bonds Payable $800,000
Premium on Bonds Pay $56,160
Bond Int Expense $16,000
Paid Semiannual interest on Titus Co bonds (straightline amortization of disc or premium)
Entry June 1
Bond Int Expense $32,000
Cash $32,000
******MY QUESTION*******
Paid semiannual interest on Titus Co bonds and purchased $400,000 face value bonds at call price
Entry Dec 1
Bond Interest Expense $32,000
Treasury Stock $408,000
Cash $440,000
