Answer:
a.)
Date | Account | Debit | Credit |
18/12/2017 | Cash (3620000 x 102%) | $3692400 | |
Bonds Payable | $3620000 | ||
Premium on Bonds Payable | $72400 | ||
(To record issuance of bonds.) | |||
02/01/2018 | Bonds Payable | $3270000 | |
Loss on Redemption of Bonds | $225100 | ||
Cash (3270000 x 105%) | $3433500 | ||
Discount on Bonds Payable (154000 x 10/25) | $61600 | ||
(To record retirement of bonds.) |
b)
The above loss is suppose to be shown as loss from ordinary
activity
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