Swiftwater Management Inc. issued 3 percent bonds with a maturity value of $6,000,000 for $5,730,522 on...
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Swiftwater Management Inc. issued 3 percent bonds with a maturity value of $6,000,000 for $5,730,522 on October 1, 2020, when the market rate of interest was 4 percent. These bonds mature on October 1, 2025, and are callable at 102.00. Swiftwater Management Inc. pays interest each April 1 and October 1. On October 1, 2021, when the bonds' market price is 103.00, Swiftwater Management Inc. retires the bonds in the most economical way available. Required Record the payment of interest and the amortization of the bond discount at October 1, 2021; also record the retirement of the bonds on that date. Swiftwater Management Inc. uses the effective-interest method to amortize the bond discount. Record the entry for the payment of interest and the amortization of the bond discount at October 1, 2021. (Record debits first, then credits. Exclude explanations from journal entries. Round amounts to the nearest whole dollar.) Journal Entry Date 2021 Accounts Interest Expense Oct. 1 Cash Discount on Bonds Payable Debit Credit Swiftwater Management Inc. issued 3 percent bonds with a maturity value of $6,000,000 for $5,730,522 on October 1, 2020, when the market rate of interest was 4 percent. These bonds mature on October 1, 2025, and are callable at 102.00. Swiftwater Management Inc. pays interest each April 1 and October 1. On October 1, 2021, when the bonds' market price is 103.00, Swiftwater Management Inc. retires the bonds in the most economical way available. Required Record the payment of interest and the amortization of the bond discount at October 1, 2021; also record the retirement of the bonds on that date. Swiftwater Management Inc. uses the effective-interest method to amortize the bond discount. Record the entry for the payment of interest and the amortization of the bond discount at October 1, 2021. (Record debits first, then credits. Exclude explanations from journal entries. Round amounts to the nearest whole dollar.) Journal Entry Date 2021 Accounts Interest Expense Oct. 1 Cash Discount on Bonds Payable Debit Credit
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