rocio5649
rocio5649
22.04.2021 • 
Business

On December 1, 2017, Cone Company issued its 9%, $790,000 face value bonds for $920,000, plus accrued interest. Interest is payable on November 1 and May 1. On December 31, 2019, the book value of the bonds, inclusive of the unamortized premium, was $840,000. On July 1, 2020, Cone reacquired the bonds at 98 plus accrued interest. Cone appropriately uses the straight-line method for the amortization because the results do not materially differ from those of the effective interest method. Requirement:
Book value of bonds on December 1, 2017
Book value of bonds on December 31, 2019
Amortization for 25 months
Monthly amortization
Book value of bonds on December 31, 2019
Amortization for January 1 to July 1, 2020
Book value of bonds on July 1, 2020
Cost of reacquisition
Gain on bond redemption

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