Petroni, Inc., which closes its books on December 31, is authorized to issue $800,000 of 9%, 20- year bonds dated March 1, 2019, with interest payments on September 1 and March 1.

REQUIRED:

Assuming that the bonds were sold at 100 plus accrued interest on July 1, 2019, prepare the necessary journal entries, post the journal entries to their respective T-accounts, and record each transaction in the financial statement effects template.

a. The bond issuance.

b. Payment of the semiannual interest on September 1, 2019.

c. Accrual of bond interest expense at December 31, 2019.

d. Payment of the semiannual interest on March 1, 2020. (The firm does not make reversing entries.)

e. Retirement of $200,000 of the bonds at 101 on March 1, 2020 (immediately after the interest payment on that date).