On January 1, 2017, Shay issues $330,000 of 12%, 15-year bonds at a price of 97.00. Six years later, on January 1, 2023, Shay retires 20% of these bonds by buying them on the open market at 104.50. All interest is accounted for and paid through December 31, 2022, the day before the purchase. The straight-line method is used to amortize any bond discount. 7. Prepare the journal entry to record the bond retirement at January 1, 2023.
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Ответ:
Answer and Explanation:
As per the data given in the question, Journal entries are as follows:
Jan 1
Bonds payable A/C Dr. $66,000
Loss on bonds' redemption A/c Dr. $4,158
To Discount on bonds payable A/c $1,188
($5,940*20%)
To Cash A/c $68,970
($66,000*104.5%)
(To record retirements of bonds before maturity)
Computation
Discount on bonds = $330,000 × 3% = $9,900
Amortized bond discount = $9,900 ÷ 15 × 6
= $3,960
Unamortized bond discount = $9,900 - $3,960
= $5,940
Face value of bonds retired = $330,000 × 20%
= $66,000
Ответ:
OMG so long questions