ABC Inc.issued $10,000,000 worth of bonds on January 1^st,2018.The bonds mature on December 31^st,2027 and carry a coupon rate of 6% payable semi-annually on June 30^th and December 31^st of each year.A market interest rate of 8% was effective throughout 2018.
Required:
1)Were the bonds issued at a premium or a discount?
2)Prepare all journal entries required during 2018.
3)Assume that on January 1^st 2019,ABC decided to retire half of the bonds for $4,800,000 in cash.Prepare the required journal entry.

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The Answer of ABC Inc.issued $10,000,000 worth of bonds on January 1^st,2018.The bonds mature on December 31^st,2027 and carry a coupon rate of 6% payable semi-annually on June 30^th and December 31^st of each year.A market interest rate of 8% was effective throughout 2018. Required: 1)Were the bonds issued at a premium or a discount? 2)Prepare all journal entries required during 2018. 3)Assume that on January 1^st 2019,ABC decided to retire half of the bonds for $4,800,000 in cash.Prepare the required journal entry.

ABC IncIssued $10,000,000 Worth of Bonds on January 1st,2018

ABC IncIssued $10,000,000 Worth of Bonds on January 1^st,2018