Safeguard Corp. produces and sells automotive and aircraft safety belts. To finance its operations, Safeguard Corp. issued $18,000,000 of 25-year, 9% callable bonds on January 1, 2006, with interest payable on January 1 and July 1. The fiscal year of the company is the calendar year. Journalize the entries to record the following selected transactions:
2006
Jan. 1. Issued the bonds for cash at their face amount.
July 1. Paid the interest on the bonds.
2012
July 1. Called the bond issue at 97, the rate provided in the bond indenture. (Omit entry for payment of interest.)