On April 1, 2014, Seminole Company sold 28,980 of its 11%, 15-year, $1,000 face value bonds at

Question:

On April 1, 2014, Seminole Company sold 28,980 of its 11%, 15-year, $1,000 bonds at 98. Interest payment dates are April 1 and October 1, and the company uses the straight-line method of bond discount amortization. On March 1, 2015, Seminole took advantage of favorable prices of its stock to extinguish 6,000 of the bonds by issuing 198,000 shares of its $10 common stock. At this time, the accrued interest was paid in cash. The company's stock was selling for $32 per share on March 1, 2015. Prepare the journal entries needed on the books of Seminole Company to record the following. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
a. April 1, 2014: issuance of the bonds.
b. October 1, 2014: payment of semiannual interest.
INSTRUCTIONS:
Prepare journal entries of the stated above.
Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...