Problem 14-7 Your answer is partially correct. Try again. On April 1, 2017, Vaughn Company sold 32,400 of its 11%, 15-year, $1,000 face value 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, 2018, Vaughn took advantage of favorable prices of its stock to extinguish 4,200 of the bonds by issuing 138,600 shares of its $10 par value common stock. At this time, the accrued interest was paid in cash. The company's stock was selling for $31 per share on March 1, 2018. Prepare the journal entries needed on the books of Vaughn Company to record the following. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final ans wers 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, 2017: issuance of the bonds. (b) October 1, 2017: payment of semiannual interest (c) December 31, 2017: accrual of interest expense. (d) March 1, 2018: extinguishment of 4,200 bonds. (No reversing entries made.) Account Titles and Explanation Date Debit Credit 4/1/17 Cash (a) 31,752,000 Discount on Bonds Payable 648,000 Bonds Payable 32,400,000 (b) 10/1/17 Interest Expense 1,803,600 Discount on Bonds Payable 21,600 Cash 1,782,000 (c) 12/31/17 Interest Expense 901,800 Discount on Bonds Payable 10,800 Interest Payable 891,000 3/1/18 Interest Payable (d) 126,000 Interest Expense 115,500 X Cash 210,000 31,500 Discount on Bonds Payable (To record payment to retiring bondholders) 3/1/18 Bonds Payable 4,200,000 Loss on Redemption of Bonds 214,900 Common Stock 1,386,000 Paid-in Capital in Excess of Par Common Stock 2,910,600 Discount on Bonds Payable 118,300 (To record extinguishment of the bonds)