Question
Early Retirement of Bonds REYLO issued $500,000 in bonds at a discount. The unamortized discount on these bonds is $25,000. As the company has excess
Early Retirement of Bonds
REYLO issued $500,000 in bonds at a discount. The unamortized discount on these bonds is $25,000. As the company has excess cash available, they decide to retire the bonds. The company must pay a 7% premium to retire the bonds early ($35,000). Record the retirement of the bonds:
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REYLO issued $500,000 in bonds at a premium. The carrying value on these bonds is $520,000. As interest rates are rising, the company decides to retire the bonds and purchase them on the open market for 95% of par. Record the retirement of the bonds:
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