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    Journal Entries for Bond Issue

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    Prepare the necessary journal entries to record the following transactions relating to the long-term issuance of bonds of Jimenez Co.:

    March 1
    Issued $800,000 face value Jimenez Co. second mortgage, 8% bonds for $872,160, 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 Jimenez Co. bonds. (Use straight-line amortization of any premium or discount.)

    December 1
    Paid semiannual interest on Jimenez Co. bonds and purchased $400,000 face value bonds at the call price in accordance with the provisions of the bond indenture.

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    Solution Summary

    The solution provides Journal Entries for Jimenez Co. bonds.