Question

Seeview Magazine issued S690.000 of 15 year, 9% ca able bonds payable on July 31, 2018 at 97 On July 31, 2021 Seav ew called the bonds a 10 Requirements 1. Without making journal entries, compute the carrying amount of the bonds payable at July 31, 2021 2 Assume all amortization has been recorded properly. Jounalize the retirement of the bonds on July 31, 2021. No explanation is required. Assume annual interest payments. Requirement 1. Without making journal entries, compute the carrying amount of the bonds payable at July 31, 2021. (Assume bonds payable are amortized using the straight-line amortization method.) First, complete the sentence below. The carrying amount of the bonds payable at issuance (July 31, 2018) is $ The discount on the bonds at issuance amounts to $ The carrying amount of the bonds payable at July 31, 2021 is S Requirement 2. Assume all amortization has been recorded properly. Journalize the retirement of the bonds on July 31, 2021. No explanation is required. (Record debits first, then credits. Exclude explanations from any journal entries.) Date 2021 Jul. 31 Bonds Payable Accounts Debit Credit 690000 Loss on Retirement of Bonds Payable Discount on Bonds Payable Cash

Answer 1

The carrying amount of bonds payable at issuance is $ $ 669,300         . The Discount on bonds payable at issuance is $ 20,700.

The carrying value of the bonds payable at July 31, 2021 is $ 673,440      ,

Working

Bond issue price (690000/100 x 97)	$      6,69,300.00
Face value	$      6,90,000.00
Discount on bond	$         20,700.00
Number of Interest payments (15 years )	15
Discount to be amortized per payment	$            1,380.00
Interest on bond	$         62,100.00

Period	Cash payment (Credit)	Interest Expense (Debit)	Discount on bond	Discount on bond balance	Bonds payable Carrying Value
At issue				$   20,700	$    6,69,300
July 31 2019	$ 62,100	$ 60,720	$       1,380	$   19,320	$    6,70,680
July 31 2020	$ 62,100	$ 60,720	$       1,380	$   17,940	$    6,72,060
July 31 2021	$ 62,100	$ 60,720	$       1,380	$   16,560	$    6,73,440

Requirement 2

Date	Accounts	Debit	Credit
July 31 2021	Bonds payable	$ 6,90,000.00
	Loss on retirement of bonds payable	$     44,160.00
	Discount on Bonds payable		$        16,560.00
	Cash		$    7,17,600.00*

*$690000/100 x 104