July 1 Issued $ 42,000,000 of 10 yr, 13% callable bonds dated July 1, 12 at a market (effective) rate of 10%, receiving cash of $49,851,213. Interest is payable semiannually on December 31 and June 30.
Oct 1 Borrowed $510,000 as a six yr 9% installment from Challenger Bank The note requires annual payments of $113,689, with the first payment occurring on Sept 30,13.
Dec31 Paid semiannual interest on the bond. The bonds premium is amortized annually in separate journal entry.
31. Recorded bond premium amortization of $ 392,561, which was determined using straight line method.
31 Closed the interest expense account.
Journalize the entries.