Problem

Retiring bonds payable [15-20 min]Worldview Magazine, Inc., issued $300,000 of 15-year, 5%...

Retiring bonds payable [15-20 min]

Worldview Magazine, Inc., issued $300,000 of 15-year, 5% callable bonds payable on July 31, 2012, at a price of 96. On July 31, 2015, Worldview called the bonds at a price of 101.

Requirements

1. Without making journal entries, compute the carrying amount of the bonds payable at July 31, 2015. The company uses the straight-line method to amortize bond discount.


2. Assume all amortization has been recorded properly. Journalize the retirement of the bonds on July 31, 2015. No explanation is required.

Step-by-Step Solution

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Solutions For Problems in Chapter 11B