Assume bonds payable are amortized using the straight-line amortization method unless stated otherwise.
Retiring bonds payable before maturity
Coastal View Magazine issued $600,000 of 15-year, 5% callable bonds payable on July 31, 2018, at 94. On July 31, 2021, Coastal View called the bonds at 101. Assume annual interest payments.
1. Without making journal entries, compute the carrying amount of the bonds payable on July 31, 2021.
2. Assume all amortization has been recorded properly. Journalize the retirement of the bonds on July 31, 2021. No explanation is required.