On January 1, 20X2, Abra Kebabra issued (sold) $3,000,000 of five-year bonds that pay 6% interest semi-annually
Question:
On January 1, 20X2, Abra Kebabra issued (sold) $3,000,000 of five-year bonds that pay 6% interest semi-annually on June 30 and December 31. The market rate of interest at time of issuance was 6.5%. The market rate of interest for similar debt is 7%. The bonds sell for $2,875,251. The company used part of the proceeds to pay $30,000 in directly attributable issuance costs.
On January 1, 20X5, Abra Kebabra repurchased all $3,000,000 of these bonds in the open market at 98.
What is the journal entry required to record the repurchase on January 1, 20x5?
Instructions:Enter a positive number if the account is in a debit position. Enter a negative number if the account is in a credit position (i.e. - 10,000). Do not use $ signs in your final answer. Do not round intermediary answers. If an account does not apply, enter 0. Round your final answers to the nearest dollar.
What is
Bonds Payable ?
Cash ?
Gain on redemption = ?
Loss on redemption =?