Question
This is a Straight-Line: Bond computations, amortization, and bond retirement problem. Please show computations! Thank You! On January 1, 2013, Shay issues $700,000 of 10%,
This is a Straight-Line: Bond computations, amortization, and bond retirement problem. Please show computations! Thank You!
On January 1, 2013, Shay issues $700,000 of 10%, 15-year bonds at a price of 97 . Six years later, on January 1, 2019, Shay retires 20% of these bonds by buying them on the open market at 104 . All interest is accounted for and paid through December 31, 2018, the day before the purchase. The straight-line method is used to amortize any bond discount.
What is the carrying (book value) of the bonds as of the close of business on December 31, 2018? What is the carrying value of the 20% soon-to-be-retired bonds on this same date?
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