roblem 128 Prepare the necessary journal entries to record the following transactions relating to the...
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Accounting
roblem 128
Prepare the necessary journal entries to record the following transactions relating to the long-term issuance of bonds of Pitts Co. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
March 1
Issued $4,000,000 face value Pitts Co. second mortgage, 8% bonds for $4,360,800, including accrued interest. Interest is payable semiannually on December 1 and June 1 with the bonds maturing 10 years from this past December 1. The bonds are callable at 102.
June 1
Paid semiannual interest on Pitts Co. bonds. (Use straight-line amortization of any premium or discount.)
December 1
Paid semiannual interest on Pitts Co. bonds and purchased $2,000,000 face value bonds at the call price in accordance with the provisions of the bond indenture.
Date
Account Titles and Explanation
Debit
Credit
March 1
June 1
December 1
(To record interest on bonds)
(To record purchase of bonds)
Answer & Explanation
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