Answer | |||
Journal Entry |
|||
Date | Particulars | Debit | Credit |
1 |
Entry for interest payment on 1st July. | ||
01-Jul-21 | Interest expense (24000000*6%) | $ 1,440,000 | |
Discount on bonds payable (1440000-1250000) | $ 190,000 | ||
Cash (25000000*5%) | $ 1,250,000 | ||
( To Recording of semi annual interest for july 1) | |||
01-Jul-21 | Entry for extinguishment: | ||
Bonds payable | $ 25,000,000 | ||
Loss on early extinguishment of bonds (balancing amount) | $ 1,310,000 | ||
Discount on bonds payable (1000000-190000) | $ 810,000 | ||
Cash (25000000*102%) | $ 25,500,000 | ||
(To Redemption of Bonds) |
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