Marin, Inc. had outstanding $12 million of 8.75% bonds (interest payable March 31 and September 30) due in 12 years. Marin was able to reduce its risk rating through investing in more real estate. As a result, on September 1, it issued $7 million of 10-year, 7% bonds (interest payable July 1 and January 1) at 100. A portion of the proceeds was used to call the 8.75% bonds at 105 on October 1. The unamortized bond discount for the 8.75% bonds was $0.938 million on October 1. Marin prepares financial statements in accordance with IFRS.

Prepare the necessary journal entries to record the issue of the new bonds and the retirement of the old bonds.

Answer rating: 100% (QA)

Retirement amount of old bonds ... View the full answer