Schwer, Inc. issued $500,000 of 10%, 15-year bonds at 95 on July 1, 2012. Interest is payable semiannually on December 31 and June 30. Through June 30, 2017, Schwer amortized $6,000 of the bond discount. On July 1, 2017, Schwer retired the bonds at 102.Calculate the loss on bond retirement at July 1, 2017.Please show your work

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Asked Oct 26, 2019
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Schwer, Inc. issued $500,000 of 10%, 15-year bonds at 95 on July 1, 2012. Interest is payable semiannually on December 31 and June 30. Through June 30, 2017, Schwer amortized $6,000 of the bond discount. On July 1, 2017, Schwer retired the bonds at 102.

Calculate the loss on bond retirement at July 1, 2017.

Please show your work

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Expert Answer

Step 1

Bonds may be issued at discount when the interest on the bonds is higher than the market interest rates. The bond discount is amortised when bond interest is charged to income statement and if any unamortised discount remains whe...

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