On January 1, 2021, Shay Company issues $350,000 of 10%, 15-year bonds. The bonds sell for $342,125. Six years later, on January 2027, Shay retires these bonds by buying them on the open market for $365,750. All interest is accounted for and paid through December 31, 2026, the day before the purchase. The straight-line method is used to amortize any bond discount. 1. What is the amount of the discount on the bonds at issuance? 2. How much amortization of the discount is recorded on the bonds for the entire period from January 1, 2021, through December 3 2026? 3. What is the carrying (book) value of the bonds as of the close of business on December 31, 2026? Prepare the journal entry to record the hond retirement
On January 1, 2021, Shay Company issues $350,000 of 10%, 15-year bonds. The bonds sell for $342,125. Six years later, on January 2027, Shay retires these bonds by buying them on the open market for $365,750. All interest is accounted for and paid through December 31, 2026, the day before the purchase. The straight-line method is used to amortize any bond discount. 1. What is the amount of the discount on the bonds at issuance? 2. How much amortization of the discount is recorded on the bonds for the entire period from January 1, 2021, through December 3 2026? 3. What is the carrying (book) value of the bonds as of the close of business on December 31, 2026? Prepare the journal entry to record the hond retirement
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 16E
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