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Suez Canal Co. found itself "stuck" this year in a negative cash flow situation. In...

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Accounting

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Suez Canal Co. found itself "stuck" this year in a negative cash flow situation. In order to raise capital, on March 31, 2021 it decided to issue 8% $200,000 face value bonds for $218,212 cash. The bonds are dated January 1, 2021, and therefore the cash received includes accrued interest. Interest is payable every June 30 and December 31. The bonds are callable at 102 and the market rate at the time of bond issuance was 7%. Required Prepare the necessary journal entries to record the following transactions: 1) Issuance of the bonds and receipt of cash by Suez Canal Co. on March 31, 2021 2) Payment of semi-annual interest on the Suez Canal Co. bonds on June 30, 2021. Show your work! You may need to start an effective interest table (remember the bonds start being amortized on January 1, 2021). 3) Retired $100,000 face value bonds (half the bonds) at the call price of 102, on December 31, 2022

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