On January 2, 2015, Ivanhoe Corporation issued $1,300,000 of 10% bonds at 98 due December 31, 2024.
Fantastic news! We've Found the answer you've been seeking!
Question:
On January 2, 2015, Ivanhoe Corporation issued $1,300,000 of 10% bonds at 98 due December 31, 2024. Interest on the bonds is payable annually each December 31. The discount on the bonds is also being amortized on a straight-line basis over the 10 years. (Straight-line is not materially different in effect from the preferable "interest method.")
The bonds are callable at 101 (i.e., at 102% of face amount), and on January 2, 2020, Ivanhoe called $960,000 face amount of the bonds and redeemed them.
Ignoring income taxes, compute the amount of loss, if any, to be recognized by Ivanhoe as a result of retiring the $960,000 of bonds in 2020.
Prepare the journal entry to record the redemption.
Expert Answer:
Posted Date:
