Homework Answers
| Discount Amount = 1050000*2/100 =21000 | |||
| Yearly amortisation = 21000/10 = 2100 | |||
| The loss recognised: | |||
| Amount $ | |||
| Bonds called & redeemed | 1050000*1.01 | 1060500 | |
| Less:Bonds payable | -1050000 | ||
| Add:Discount not amortised | 21000-(2100*5) | 10500 | |
| Loss on redeemption | 21000 | ||
| Journal Entry: | |||
| Date | Accounts Titles and explanation | Debit | Credit |
| 2-Jan-17 | Bonds payable | 1050000 | |
| Loss on Redeemption | 21000 | ||
| Discount on Bond issue | 10500 | ||
| Cash | 1060500 | ||
| (being bonds valuiing $1050000 got redeemed @ | |||
| 103 with adjustment of discount not amortised) | |||
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SOURCES Exercise 14-12 effect from the preferable -interest method") face amount of the bonds and redeemed...
Exercise 14-12 On January 2, 2012, Waterway Corporation issued $1,100,000 of 10% bonds at 98 due December 31, 2021. Inte...
Exercise 14-12
On January 2, 2012, Waterway Corporation issued $1,100,000 of
10% bonds at 98 due December 31, 2021. 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 101 (i.e., at 101% of face amount), and
on January 2, 2017, Waterway called $660,000 face amount...
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Exercise 14-12
On January 2, 2015, Stellar Corporation issued $1,550,000 of 10%
bonds at 98 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 101 (i.e., at 101% of face amount), and
on January 2, 2020, Stellar called $930,000 face amount...
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On January 2, 2015, Marin Corporation issued $2,150,000 of 10% bonds at 98 due December 31,...
On January 2, 2015, Marin Corporation issued $2,150,000 of 10%
bonds at 98 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 101 (i.e., at 101% of face amount), and
on January 2, 2020, Marin called $1,290,000 face amount of the...
Exercise 14-12
On January 2, 2012, Waterway Corporation issued $1,100,000 of
10% bonds at 98 due December 31, 2021. 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 101 (i.e., at 101% of face amount), and
on January 2, 2017, Waterway called $660,000 face amount...
Exercise 14-12 On January 2, 2012, Martinez Corporation issued $1,550,000 of 10 % bonds at 98 due December 31, 2021. 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 101 (.e., at 101 % of face amount), and on January 2, 2017, Martinez called $930,000...
Exercise 14-12
On January 2, 2015, Stellar Corporation issued $1,550,000 of 10%
bonds at 98 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 101 (i.e., at 101% of face amount), and
on January 2, 2020, Stellar called $930,000 face amount...
Exercise 14-12 On January 2, 2015, Swifty Corporation issued $2,100,000 of 10% bonds at 97 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, Swifty called $1,260,000 face amount...
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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 101 (i.e., at 101% of face amount), and
on January 2, 2020, Marin called $1,290,000 face amount of the...
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