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  3. wx company issued $500,000, 8% bonds on january 1,

wx Company issued $500,000, 8% bonds on January 1, Year 1. The bonds pay interest...

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Accounting

wx Company issued $500,000, 8% bonds on January 1, Year 1. The bonds pay interest on June 30 and December 31 and mature on December 31, Year 10. The bonds were issued to yield 6% and are callable at 110. On January 1, Year 4, wx Company redeemed the entire bond issue. wx Company uses the effective interest method to account for bond discounts and premiums.

The entry to record the redemption of the bonds on January 1, Year 4 would include

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