Robinson, Inc. had outstanding $5 million of 11% bonds (interest payable July 31 and January 31) due in 10 years. On July 1, it issued $7 million of 15-year, 10% bonds (interest payable July 1 and January 1) at 98. A portion of the proceeds was used to call the 11% bonds at 102 on August 1. The unamortized bond discount for the 11% bonds was $120,000 on August 1. Robinson prepares financial statements in accordance with IFRS.
Instructions
Prepare the necessary journal entries to record the issue of the new bonds and the retirement of the old bonds.