Four companies are redeeming bonds before the maturity date. Each company had bonds with the following...
Four companies are redeeming bonds before the maturity date.
Each company had bonds with the following
characteristics:
- Face value of $300,000
- Unamortized premium on bonds payable of $1,500
Which company would record the greatest loss on bond
redemption?
-
A : Company 4, which redeemed bonds at 99
-
B : Company 1, which redeemed bonds at 97
-
C : Company 2, which redeemed bonds at 102
-
D : Company 3, which redeemed bonds at 105
Homework Answers
Correct option is: D: Company 3, which redeemed bonds at 105
As Company 1 and 4 redeeming their dividends at a price lower than face value therefore they are in a position to record gain. Whereas, Company 2 and 3 redeeming at a price higher than face value of bonds and Company 3 repay highest of all , Therefore, Company 3 will record greatest loss on bonds redemption
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Four companies are redeeming bonds before the maturity date.
Each company had bonds with the following...
On January 1, 2020, Shamrock Incorporated redeemed bonds prior to their maturity date of January 1,...
On January 1, 2020, Shamrock Incorporated redeemed bonds prior to their maturity date of January 1, 2021. The face value of the bonds was $400,000, and the redemption was performed at 99. As at the redemption date, the unamortized premium was $9,790. Prepare the corporation’s journal entry to record the redemption of the bonds. Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount...
On January 1, 2020, Shamrock Incorporated redeemed bonds prior to their maturity date of January 1,...
On January 1, 2020, Shamrock Incorporated redeemed bonds prior to their maturity date of January 1, 2021. The face value of the bonds was $400,000, and the redemption was performed at 99. As at the redemption date, the unamortized premium was $9,790. Prepare the corporation’s journal entry to record the redemption of the bonds (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account...
PLEASE SHOW ALL WORK Skysong Company had bonds outstanding with a maturity value of $322,000. On...
PLEASE SHOW ALL WORK
Skysong Company had bonds outstanding with a maturity value of $322,000. On April 30, 2020, when these bonds had an unamortized discount of $11,000, they were called in at 106. To pay for these bonds, Skysong had issued other bonds a month earlier bearing a lower interest rate. The newly issued bonds had a life of 10 years. The new bonds were issued at 102 (face value $322,000). Ignoring interest, compute the gain or loss. Loss...
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Sheridan Company retires its $380000 face value bonds at 105 on January 1, following the payment of interest. The carrying value of the bonds at the redemption date is $394231. The entry to record the redemption will include a a. debit of $19000 to Premium on Bonds Payable. b. credit of $4769 to Gain on Bond Redemption. c. credit of $14231 to Loss on Bond Redemption. d. debit of $14231 to Premium on Bonds Payable.
Ayayai Company had bonds outstanding with a maturity value of $ 313,000. On April 30, 2017,when...
Ayayai Company had bonds outstanding with a maturity value of $ 313,000. On April 30, 2017,when these bonds had an unamortized discount of $ 9,000, they were called in at 104. To pay for these bonds, Ayayai had issued other bonds a month earlier bearing a lower interest rate. The newly issued bonds had a life of 10 years. The new bonds were issued at 102 (face value $ 313,000) lgnoring interest, compute the gain or loss. Loss on redemption...
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QUESTION 4 "Bonita Industries retires its 5400000 face value bonds at 102 on January 1, following the payment of interest. The carrying value of the bonds at the redemption date is $385000. The entry to record the redemption will include a debit of 58000 to Premium on Bonds Payable. credit of $15000 to Loss on Bond Redemption credit of $15000 to Discount on Bonds Payable. debit of $23000 to Gain on Bond Redemption,
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Redemption of Bonds Payable A $850,000 bond issue on which there is an unamortized premium of $73,000 is redeemed for $821,000. Journalize the redemption of the bonds. If an amount box does not require an entry, leave it blank. Bonds Payable 850,000 850,000 Gain on Redemption of Bonds x 102,000 Premium on Bonds Payable x 73,000 Cash 821,000 Feedback Check My Work The gain or loss is the balancing amount needed to complete the entry and is the difference between...
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Novak Company had bonds outstanding with a maturity value of $312,000. On April 30, 2020, when these bonds had an unamortized discount of $10,000, they were called in at 106. To pay for these bonds, Novak had issued other bonds a month earlier bearing a lower interest rate. The newly issued bonds had a life of 10 years. The new bonds were issued at 101 (face value $312,000). Ignoring interest, compute the gain or loss. Loss on redemption $ Ignoring...
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Ivanhoe Company issued $1,720,000 of bonds on January 1, 2020. Prepare the journal entry to record the issuance of the bonds if they are issued at (1) 100, (2) 97, and (3) 105 Prepare the journal entry to record the redemption of the bonds at maturity, assuming the bonds were issued at 100. Prepare the journal entry to record the redemption of the bonds before maturity at 97. Assume the balance in Premium on Bonds Payable is $8,250.
PLEASE SHOW ALL WORK
Skysong Company had bonds outstanding with a maturity value of $322,000. On April 30, 2020, when these bonds had an unamortized discount of $11,000, they were called in at 106. To pay for these bonds, Skysong had issued other bonds a month earlier bearing a lower interest rate. The newly issued bonds had a life of 10 years. The new bonds were issued at 102 (face value $322,000). Ignoring interest, compute the gain or loss. Loss...
Ayayai Company had bonds outstanding with a maturity value of $ 313,000. On April 30, 2017,when these bonds had an unamortized discount of $ 9,000, they were called in at 104. To pay for these bonds, Ayayai had issued other bonds a month earlier bearing a lower interest rate. The newly issued bonds had a life of 10 years. The new bonds were issued at 102 (face value $ 313,000) lgnoring interest, compute the gain or loss. Loss on redemption...
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