Reference no: EM132463200

On April 1, 2020, Martinez Company sold 16,200 of its 12%, 15-year, $1,000 face value bonds at 97. Interest payment dates are April 1 and October 1, and the company uses the straight-line method of bond discount amortization. On March 1, 2021, Martinez took advantage of favorable prices of its stock to extinguish 7,500 of the bonds by issuing 247,500 shares of its $10 par value common stock. At this time, the accrued interest was paid in cash. The company's stock was selling for $32 per share on March 1, 2021.

Question 1: Prepare the journal entries needed on the books of Martinez Company to record the following. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Point (a) April 1, 2020: issuance of the bonds.

Point (b) October 1, 2020: payment of semiannual interest.

Point (c) December 31, 2020: accrual of interest expense.

Point (d) March 1, 2021: extinguishment of 7,500 bonds. (No reversing entries made.)

Attachment:- journal entriy.rar