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On June 1, 2017, Royal Palm Company sold 6,000 of its 12%, 20-year, $1,000 face...

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Accounting

On June 1, 2017, Royal Palm Company sold 6,000 of its 12%, 20-year, $1,000 face value bonds. At the time, the market rate for a similar bond is 8%. Interest payment dates are December 1 and June 1, and the company uses the effective rate method of amortization. On December 1, 2018, Royal Palm paid cash $4,250,000 to extinguish 4,000 of the bonds. At this time, the accrued interest was paid in cash. Prepare all necessary journal entries.

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