Solution 1&2:
Amount of discount = Face value - Issue price = $320,000 - $309,600 = $10,400
Discount amortized from 2019 to 2024 = $10,400*6/20 = $3,120
Solution 3:
Carrying value of bond on Dec 31, 2024 = Par value - Remaining discount = $320,000 - ($10,400 - $3,120) = $312,720
Solution 4:
Date | General Journal | Debit | Credit |
1-Jan-25 | Bond Payable Dr | $320,000 | |
Loss on retirement of bond Dr | $22,480 | ||
To Cash | $335,200 | ||
To Discount on Bond Payable | $7,280 | ||
(To record early retirement of bonds) |
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