Nivan Co. issued $500,000 of 5 percent, 10-year, callable bonds on January 1, 2016, at their face

Question:

Nivan Co. issued $500,000 of 5 percent, 10-year, callable bonds on January 1, 2016, at their face value. The call premium was 3 percent (bonds are callable at 103). Interest was payable annually on December 31. The bonds were called on December 31, 2020.

Required

Prepare the journal entries to record the bond issue on January 1, 2016, and the bond redemption on December 31, 2020. Entries for accrual and payment of interest are not required.