CM Entertainment Inc owns and operates movie theatres The company sold 6 5 percent bonds for $ 105,000,000 and used the cash proceeds to retire bonds with a face value of $ 100,000,000 with a coupon rate of 8 percent At that time, the old bonds had a carrying amount of $ 99,547,000 Required 1 Why d...

Req 1 There are a number of reasons why a bond may be retired early For example the bo ...

CM Entertainment Inc. owns and operates movie theatres. The company sold 6.5 percent bonds for $ 105,000,000

Question:

CM Entertainment Inc. owns and operates movie theatres. The company sold 6.5 percent bonds for $ 105,000,000 and used the cash proceeds to retire bonds with a of $ 100,000,000 with a rate of 8 percent. At that time, the old bonds had a carrying amount of $ 99,547,000.
Required:
1. Why did the company issue new bonds to retire the old bonds?
2. Prepare the journal entries to record the issuance of the new bonds and the early retirement of the old bonds.
3. How should CM Entertainment report the gain or loss on retirement of the old bonds? Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...