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On May 1, 2019, Star Corporation issued $440,000 face value, 10 percent bonds at 98.6....

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Accounting

On May 1, 2019, Star Corporation issued $440,000 face value, 10 percent bonds at 98.6. The bonds are dated May 1, 2019, and mature 10 years later. The discount is amortized on each interest payment date. The interest is payable semiannually on May 1 and November 1. On May 1, 2021, after paying the semiannual interest, the corporation purchased the outstanding bonds from the bondholders and retired them. The purchase price was 99.0. Required: Prepare the entry in general journal form to record the repurchase and retirement of the bonds. (Use the Loss on Early Retirement of Bonds account.) Analyze: If Star Corporation did not purchase the outstanding bonds, what total bond interest expense would have been incurred over the life of the bonds?

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