On January 1, 2021, Shay Company issues $370,000 of 12%, 12-year bonds. The bonds sell for...

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On January 1, 2021, Shay Company issues $370,000 of 12%, 12-year bonds. The bonds sell for $360,750. Six years later, on January 1, 2027, Shay retires these bonds by buying them on the open market for $388,500. All interest is accounted for and paid through December 31, 2026, the day before the purchase. The straight-line method is used to amortize any bond discount. 1. What is the amount of the discount on the bonds at issuance? 2. How much amortization of the discount is recorded on the bonds for the entire period from January 1, 2021, through December 31, 2026? 3. What is the carrying (book) value of the bonds as of the close of business on December 31, 2026? 4. Prepare the journal entry to record the bond retirement. 1. What is the amount of the discount on the bonds at issuance? 2. How much amortization of the discount is recorded on the bonds for the entire period from January 1, 2021, through December 31, 2026? 1. Amount of discount 2. Amortization of discount On January 1, 2021, Shay Company issues $370,000 of 12%, 12-year bonds. The bonds sell for $360,750. Six years later, on January 1, 2027, Shay retires these bonds by buying them on the open market for $388,500. All interest is accounted for and paid through December 31, 2026, the day before the purchase. The straight-line method is used to amortize any bond discount. 1. What is the amount of the discount on the bonds at issuance? 2. How much amortization of the discount is recorded on the bonds for the entire period from January 1, 2021, through December 31, 2026? 3. What is the carrying (book) value of the bonds as of the close of business on December 31, 2026? 4. Prepare the journal entry to record the bond retirement. 1. What is the amount of the discount on the bonds at issuance? 2. How much amortization of the discount is recorded on the bonds for the entire period from January 1, 2021, through December 31, 2026? 1. Amount of discount 2. Amortization of discount

Answer rating: 100% (QA)

D Discount on bond issuance 370 000 4360750 9250 2 Amortization of dis ... View the full answer