urrent Attempt in Progress On January 2, 2015, Windsor Corporation issued $1,150,000 of 10% bonds at 99 due December 31, 2024. Interest on the bonds is payable annually each December 31. The discount on the bonds is also being amortized on a straight-line basis over the 10 years. (Straight-line is not materially different in effect from the preferable “interest method.”)The bonds are callable at 102 (i.e., at 102% of face amount), and on January 2, 2020, Windsor called $690,000 face amount of the bonds and redeemed them.Ignoring income taxes, compute the amount of loss, if any, to be recognized by Windsor as a result of retiring the $690,000 of bonds in 2020. (Round answer to 0 decimal places, e.g. 38,548.)Loss on redemption$enter a dollar amount of loss on redemption rounded to 0 decimal placesPrepare the journal entry to record the redemption. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)DateAccount Titles and ExplanationDebitCreditJanuary 2, 2020enter an account title to record the transaction on January 2, 2017enter a debit amountenter a credit amount enter an account title to record the transaction on January 2, 2017enter a debit amountenter a credit amount enter an account title to record the transaction on January 2, 2017enter a debit amountenter a credit amount enter an account title to record the transaction on January 2, 2017enter a debit amountenter a credit amount eTextbook and Media List of Accounts

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Asked Aug 29, 2019
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urrent Attempt in Progress

 

On January 2, 2015, Windsor Corporation issued $1,150,000 of 10% bonds at 99 due December 31, 2024. Interest on the bonds is payable annually each December 31. The discount on the bonds is also being amortized on a straight-line basis over the 10 years. (Straight-line is not materially different in effect from the preferable “interest method.”)

The bonds are callable at 102 (i.e., at 102% of face amount), and on January 2, 2020, Windsor called $690,000 face amount of the bonds and redeemed them.

Ignoring income taxes, compute the amount of loss, if any, to be recognized by Windsor as a result of retiring the $690,000 of bonds in 2020. (Round answer to 0 decimal places, e.g. 38,548.)

Loss on redemption

$
enter a dollar amount of loss on redemption rounded to 0 decimal places


Prepare the journal entry to record the redemption. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date
Account Titles and Explanation
Debit
Credit
January 2, 2020
enter an account title to record the transaction on January 2, 2017

enter a debit amount


enter a credit amount

 

enter an account title to record the transaction on January 2, 2017

enter a debit amount


enter a credit amount

 

enter an account title to record the transaction on January 2, 2017

enter a debit amount


enter a credit amount

 

enter an account title to record the transaction on January 2, 2017

enter a debit amount


enter a credit amount

 

eTextbook and Media
List of Accounts

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Expert Answer

Step 1

Bonds are issued at $99, so the discount is $1($100 - $99...

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Calculation of discount on issue Calculation of number of bonds: Discount on bonds = Discount x Number of bonds Number of bonds =Issued am ount Par value =S1x11,500 S11,500 $1150, 000 Calculation of amortization of discount: 100 =11,500 Amortization of Discount on bonds each vears = Discount on bonds Number of years Thus, the number of bonds is $11,500 $11,500 10 =S1,150 Unamortized discount on redeemable bonds: Unamortized discount on redeemable bonds = Number of years x Di scount x Number of bonds =5x$1x6900 =S34,500 Calculation of loss on redemption: Loss on redemption = Unamortized discount +Premium on redemption =S34,500+(6900 x $2) S48,300

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