Suppose the president of the united states announces a new set of reforms that includes a new anti-inflation program. assuming
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Answer and Explanation:
The Journal entry is shown below:-
1. Cash Dr, $15,000,000
To Bonds payable $15,000,000
(Being issue of bonds is recorded)
2. Interest expense on bonds Dr, $675,000
To cash $675,000 ($15,000,000 × 9% × 6 ÷ 12)
(Being payment of interest is recorded)
3. Bonds payable Dr, $15,000,000
To Gain on redemption of bonds $600,000
To Cash ($15,000,000 × 0.96) $14,400,000
(Being redemption on bonds is recorded)
