On December 1, 2017, Cone Company issued its 9%, $450,000 face value bonds for $520,000, plus accrued interest. Interest is payable on November 1 and May 1. On December 31, 2019, the book value of the bonds, inclusive of the unamortized premium, was $480,000. On July 1, 2020, Cone reacquired the bonds at 99 plus accrued interest. Cone appropriately uses the straight-line method for the amortization because the results do not materially differ from those of the effective interest method. Requirement: Book value of bonds on December 1, 2017 _______ Book value of bonds on December 31, 2019 _______ Amortization for 25 months _______ Monthly amortization _______ Book value of bonds on December 31, 2019 ________ Amortization for January 1 to July 1, 2020 ________ Book value of bonds on July 1, 2020 ________ Cost of reacquisition ________ Gain on bond redemption
On December 1, 2017, Cone Company issued its 9%, $450,000 face value bonds for $520,000, plus accrued interest. Interest is payable on November 1 and May 1. On December 31, 2019, the book value of the bonds, inclusive of the unamortized premium, was $480,000. On July 1, 2020, Cone reacquired the bonds at 99 plus accrued interest. Cone appropriately uses the straight-line method for the amortization because the results do not materially differ from those of the effective interest method. Requirement: Book value of bonds on December 1, 2017 _______ Book value of bonds on December 31, 2019 _______ Amortization for 25 months _______ Monthly amortization _______ Book value of bonds on December 31, 2019 ________ Amortization for January 1 to July 1, 2020 ________ Book value of bonds on July 1, 2020 ________ Cost of reacquisition ________ Gain on bond redemption
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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Question
On December 1, 2017, Cone Company issued its 9%, $450,000 face
Requirement:
Book value of bonds on December 1, 2017 | _______ |
Book value of bonds on December 31, 2019 | _______ |
Amortization for 25 months | _______ |
Monthly amortization | _______ |
Book value of bonds on December 31, 2019 | ________ |
Amortization for January 1 to July 1, 2020 | ________ |
Book value of bonds on July 1, 2020 | ________ |
Cost of reacquisition | ________ |
Gain on bond redemption |
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