E14-13B (L01,2) (Entries for Retirement and Issuance of Bonds) Cummings, Inc. had outstanding $8,000,000 of...
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E14-13B (L01,2) (Entries for Retirement and Issuance of Bonds) Cummings, Inc. had outstanding $8,000,000 of 12% bonds (interest payable July 31 and January 31) due in 10 years. On July 1, it issued $12,000,000 of 10%, 15-year bonds (interest payable July 1 and January 1) at 98. A portion of the proceeds was used to call the 12% bonds at 106 on August 1. Unamortized bond discount and issue cost applicable to the 12% bonds were $150,000 and $60,000, respectively.
Instructions
Prepare the journal entries necessary to record the issue of the new bonds and the refunding of the bonds.
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