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Prepare the journal entry to record the repurchase

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Question - On December 31, 20x0, you issue 10 year bonds with a face value of $15,000,000 and a coupon rate of 3.8%. The bonds were issued to yield 4%. The bonds pay coupon payments on June 30 and December 31 of every year. You incurred $68,000 in direct bond issue costs.

Required -

a) Prepare the journal entries for the years 20x0 and 20x1.

b) On July 1, 20x7, 25% of the bond issue is repurchased on the open market at 98. Prepare the journal entry to record the repurchase.

c) Prepare the journal entry at December 31, 20x7.

Reference no: EM132948959

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