GHI Inc.issued $5,000,000 worth of bonds on January 1^st,2018.The bonds mature on December 31^st,2017 and carry a coupon rate of 4% payable semi-annually on June 30^th and December 31^st of each year.A market interest rate of 6% 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,GHI Inc.decided to retire ALL of the bonds for $5,500,000 in cash.Prepare the required journal entry.

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The Answer of GHI Inc.issued $5,000,000 worth of bonds on January 1^st,2018.The bonds mature on December 31^st,2017 and carry a coupon rate of 4% payable semi-annually on June 30^th and December 31^st of each year.A market interest rate of 6% 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,GHI Inc.decided to retire ALL of the bonds for $5,500,000 in cash.Prepare the required journal entry.

GHI IncIssued $5,000,000 Worth of Bonds on January 1st,2018

GHI IncIssued $5,000,000 Worth of Bonds on January 1^st,2018