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ABC Company issued callable bonds at par dated January 1, 2021. The call feature provides...

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Accounting

  1. ABC Company issued callable bonds at par dated January 1, 2021. The call feature provides the bondholders with the right to receive $100 for each $1,000 bond. The par value, that is, the maturity value is $3,500,000. The bonds mature at the end of four years and pay 9% semiannually on June 30 and December 31.

Interest rates changed dramatically in the marketplace, and ABC Company exercised its option to call the bonds on 1/1/22 when the entire bond issue was retired.

Using the attached T-account template (or prepare an equation presentation using a spreadsheet format), prepare the entries to recognize the following transactions

1/1/21 Issuance of the bond

6/30/21 The first semi-annual interest payment

12/31/21 The second semi-annual interest payment

1/1/22 Bond retirement

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