Mel issued $12,000,000 of 4.5%, 2-year callable term bonds on 01-01-18 when the market rate...
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Accounting
Mel issued $12,000,000 of 4.5%, 2-year callable term bonds on 01-01-18 when the market rate for similar bonds was 5%. The bonds were dated 01-01-18 with interest payable January 01 and July 01. Upon issuing the bonds, Mel incurred and paid $82,000 of bond issuance costs. Mel can call in, i.e., retire, some or all of the bonds any time after 01-01-19 at 102 plus interest. Mel only prepares AJEs every December 31. Mel uses the effective interest method to amortize any bond discount or premium. On 04-01-19, Mel called in $9,000,000 of the bonds. Prepare the entries Mel should make on:
a. 01-01-18
b. 07-01-18
c. 12-31-18
d. 01-01-19
e. 04-01-19
f. 07-01-19
g. 12-31-19
h. 01-01-20 Round your debits and credits to the nearest dollar and make sure that your debits equal your credits.
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