Oriole Capital Ltd. issued 550 $1,000 bonds at 105. After issuance, similar bonds were sold at 99.
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Question:
Oriole Capital Ltd. issued 550 $1,000 bonds at 105. After issuance, similar bonds were sold at 99. Assume that Oriole Capital Ltd. follows ASPE and valued the debt component of the instruments first, applying the residual to the equity component. On a date when the bonds had a carrying value of $546,000 and fair value of $548,390, Oriole paid $590,000 in cash to the bondholders to retire the bonds early.
Record the retirement using the book value method
Account Titles and Explanation | Debit | Credit |
---|---|---|
Bond Payable | enter a debit amount | enter a credit amount |
Contributed Surplus-Conversion Rights | enter a debit amount | enter a credit amount |
Loss of Redemption of Bond | enter a debit amount | enter a credit amount |
Retain Earning | enter a debit amount | enter a credit amount |
Cash | enter a debit amount | enter a credit amount |
Related Book For
Introduction to Governmental and Not for Profit Accounting
ISBN: 978-0132776011
7th edition
Authors: Martin Ives, Terry K. Patton, Suesan R. Patton
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