On January 1, 2014, Tiamund Corp. sold at 103, 100 of its $1,000 face value, 5-year, 9%,

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On January 1, 2014, Tiamund Corp. sold at 103, 100 of its $1,000 face value, 5-year, 9%, non-convertible, retractable bonds. The retraction feature allows the holder to redeem the bonds at an amount equal to three times net income, to a maximum of $1,200 per bond. Tiamund has net income of $250, $350, and $450 for the fiscal years of December 31, 2014, 2015, and 2016, respectively. Tiamund Corp. prepares its financial statements in accordance with ASPE.
Instructions
(a) Prepare the entry to record the issuance of the bonds.
(b) Using straight-line amortization, how much would the bond be carried at on the statement of financial position for the 2014, 2015, and 2016 year ends?
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Intermediate Accounting

ISBN: 978-1118300855

10th Canadian Edition Volume 2

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy

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