Pas Company issued $1,000,000 of bonds on January 1, 2012.

Pas Company issued $1,000,000 of bonds on January 1, 2012.

(a) Prepare the journal entry to record the issuance of the bonds if they are issued at (1) 100, (2) 98, and (3) 103.
(b) Prepare the journal entry to record the retirement of the bonds at maturity, assuming the bonds were issued at 100.
(c) Prepare the journal entry to record the retirement of the bonds before maturity at 98. Assume the balance in Premium on Bonds Payable is $9,000.
(d) Prepare the journal entry to record the conversion of the bonds into 30,000 shares of $10 par value common stock. Assume the bonds were issued at par.

a) (1) Cash Debit 1,000,000
Bonds Payable Credit 1,000,000

(2)Cash Debit 980,000
Discount on Bonds Payable Debit 20,000
Bonds Payable Credit 1,000,000

(3)Cash Debit 1,030,000
Bonds Payable Credit 1,000,000
Premium on Bonds Payable Credit 30,000

(b) Bonds Payable Debit 1,000,000
Cash Credit 1,000,000

(c)Bonds Payable Debit 1,000,000
Premium on Bonds Payable Debit 9,000
Cash Credit 980,000
Gain on Bond Redemption Credit 29,000

(d)Bonds Payable Debit 1,000,000
Paid-in Capital in Excess of Par-Common Stock Credit 700,000
Common Stock Credit 300,000