On June 30, 2015 Masters Inc. sold 10,000 of its $1,000 face value 10-year, 8% bonds when
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On June 30, 2015 Masters Inc. sold 10,000 of its $1,000 face value 10-year, 8% bonds when the market rate of interest was 6%. Interest payments are made on June 30th and Jan 1st each year. Masters follows IFRS. On May 1, 2017 Masters extinguished 3,000 of the bonds by issuing 50,000 common shares. At this time the accrued interest was paid to the bondholders whose bonds were being extinguished. In addition, to the bond retirement Masters issued 10,000 new shares at $31 each.
Prepare journals entries for the bond issue, payment of semi-annual interest, yearend adjusting entry, the retirement of the bonds and the issue of the additional shares. The company has a Dec 31 year end.
Related Book For
Financial Accounting: A Business Process Approach
ISBN: 978-0136115274
3rd edition
Authors: Jane L. Reimers
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