Mia Breen Corp. produces and sells wind-energy-driven engines. To finance its operations, Mia Breen issued $996,000 of 15-year, 9% callable bonds on May 1, 20Y5, at their face amount, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year. Journalize the entries to record the following selected transactions. Refer to the Chart of Accounts for exact wording of account titles. Year 1
May1Issued the bonds for cash at their face amount.
Nov.1Paid the interest on the bonds.
Year 5
Nov.1Called the bond issue at 99, the rate provided in the bond indenture. (Omit entry for payment of interest.)
CHART OF ACCOUNTS
Mia Breen Corp.
General Ledger
ASSETS
110Cash
111Petty Cash
121Accounts Receivable
122Allowance for Doubtful Accounts
126Interest Receivable
127Notes Receivable
131Merchandise Inventory
141Office Supplies
142Store Supplies
151Prepaid Insurance
191Land
192Store Equipment
193Accumulated Depreciation-Store Equipment
194Office Equipment
195Accumulated Depreciation-Office Equipment
LIABILITIES
210Accounts Payable
221Salaries Payable
231Sales Tax Payable
232Interest Payable
241Notes Payable
251Bonds Payable
252Discount on Bonds Payable
253Premium on Bonds Payable
EQUITY
311Common Stock
312Paid-In Capital in Excess of Par-Common Stock
315Treasury Stock
321Preferred Stock
322Paid-In Capital in Excess of Par-Preferred Stock
331Paid-In Capital from Sale of Treasury Stock
340Retained Earnings
351Cash Dividends
352Stock Dividends
390Income Summary
REVENUE
410Sales
610Interest Revenue
611Gain on Redemption of Bonds
EXPENSES
510Cost of Merchandise Sold
515Credit Card Expense
516Cash Short and Over
521Sales Salaries Expense
522Office Salaries Expense
531Advertising Expense
532Delivery Expense
533Repairs Expense
534Selling Expenses
535Rent Expense
536Insurance Expense
537Office Supplies Expense
538Store Supplies Expense
541Bad Debt Expense
561Depreciation Expense-Store Equipment
562Depreciation Expense-Office Equipment
590Miscellaneous Expense
710Interest Expense
711Loss on Redemption of Bonds