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Truax Co. issued $250,000 of 6 percent, 10 year, callable bonds on January 1, 2013, at their face value. The call premium was 2 percent (bonds are callable at 102). Interest was payable annually on December 31. The bonds were called on December 31, 2016.
Required:
Prepare the journal entries to record the bond issue on January 1, 2013, and the bond redemption on December 31, 2016. Assume that all entries to accrue and pay interest were recorded correctly.
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