On January 1, 2018, Shay Company issues $1,000,000 of 10%, 10-year bonds at a price of 98
Fantastic news! We've Found the answer you've been seeking!
Question:
On January 1, 2018, Shay Company issues $1,000,000 of 10%, 10-year bonds at a price of 98 1/2. Four years later, on January 1, 2022, Shay retires 40% of these bonds by buying them on the open market at 102½. All interest is accounted for and paid through December 31, 2021, the day before the purchase. The straight-line method is used to amortize any bond discount.
- How much does the company receive when it issues the bonds on January 1, 2018?
- 985,000
- What is the amount of the discount on the bonds at January 1, 2018?
15,000
- How much amortization of the discount is recorded on the bonds for the entire period from January 1, 2018, through December 31, 2021?
60,000
- What is the carrying (book) value of the bonds as of the close of business on December 31, 2021?
is the carrying value of the 40% soon-to-be-retired bonds on this same date?
- How much did the company pay on January 1, 2022, to purchase the bonds that it retired?
- What is the amount of the recorded gain or loss from retiring the bonds?
- Prepare the journal entry to record the bond retirement at January 1, 2022.
Date | Accounts and Explanations | Post. Ref. | Debit | Credit |
Related Book For
Financial Accounting Information for Decisions
ISBN: 978-1259917042
9th edition
Authors: John J. Wild
Posted Date: