The long-term liability section of Eastern Post Corporation's balance sheet as of December 31, 2010, included 10%

Question:

The long-term liability section of Eastern Post Corporation's as of December 31, 2010, included 10% bonds having a face amount of $40 million and a remaining premium of $6 million. On January 1, 2011, Eastern Post retired some of the bonds before their scheduled maturity.

Required:
Prepare the journal entry by Eastern Post to record the redemption of the bonds under each of the independent circumstances below:
1. Eastern Post called half the bonds at the call price of 102 (102% of face amount).
2. Eastern Post repurchased $10 million of the bonds on the open market at their market price of $10.5 million.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...