Question
1a) A company holds a $150,000 par value of bonds with a carrying value of $147,950. The company calls the bonds at $151,000. Prepare the
1a) A company holds a $150,000 par value of bonds with a carrying value of $147,950. The company calls the bonds at $151,000.
Prepare the journal entry to record the retirement of the bonds.
1b) On January 1 of Year 1, Congo Express Airways issued $3,240,000 of 8% bonds that pay interest semiannually on January 1 and July 1. The bond issue price is $2,980,000 and the market rate of interest for similar bonds is 9%. The bond premium or discount is being amortized at a rate of $8,667 every six months. After accruing interest at year-end, the company's December 31, Year 1 balance sheet should reflect total liabilities associated with the bond issue in the amount of?
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