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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The solution provides Journal Entries for Jimenez Co. bonds.
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