Question
Bats Corporation issued $800,000 of 12% face value bonds for $851,705.70. The bonds were dated and issued on April 1, 2016, are due March 31,
Bats Corporation issued $800,000 of 12% face value bonds for $851,705.70. The bonds were dated and issued on April 1, 2016, are due March 31, 2020, and pay interest semiannually on September 30 and March 31. Bats sold the bonds to yield 10%.
Required: Assume the company retires the bonds on June 30, 2017, at 103 plus accrued interest.
The question is how to prepare the journal entries to record the bond retirement using the: a.straight-line method of amortization b.effective interest method of amortization?
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Intermediate Accounting
Authors: kieso, weygandt and warfield.
IFRS Edition
978-1118443965, 1118800532, 9781118800539, 978-0470873991
