Question
On January 1, 2015, Shay issues $280,000 of 12%, 12-year bonds at a price of 97.25. Six years later, on January 1, 2021, Shay retires
| On January 1, 2015, Shay issues $280,000 of 12%, 12-year bonds at a price of 97.25. Six years later, on January 1, 2021, Shay retires 30% of these bonds by buying them on the open market at 104.75. All interest is accounted for and paid through December 31, 2020, the day before the purchase. The straight-line method is used to amortize any bond discount. |
rev: 11_17_2015_QC_CS-33054
5.
value: 1.33 points
Required information
| 1. | How much does the company receive when it issues the bonds on January 1, 2015? |
rev: 11_17_2015_QC_CS-33054
Hints
References
eBook & Resources
Hint #1
Ask your instructor a questionCheck my work
6.
value: 1.33 points
Required information
| 2. | What is the amount of the discount on the bonds at January 1, 2015? |
Hints
References
eBook & Resources
Hint #1
Ask your instructor a questionCheck my work
7.
value: 1.33 points
Required information
| 3. | How much amortization of the discount is recorded on the bonds for the entire period from January 1, 2015, through December 31, 2020? |
Hints
References
eBook & Resources
Hint #1
Ask your instructor a questionCheck my work
8.
value: 1.33 points
Required information
| 4. | What is the carrying (book) value of the bonds and the carrying value of the 30% soon-to-be-retired bonds as of the close of business on December 31, 2020? |
 |
Hints
References
eBook & Resources
Hint #1
Ask your instructor a questionCheck my work
9.
value: 1.33 points
Required information
| 5. | How much did the company pay on January 1, 2021, to purchase the bonds that it retired? |
Hints
References
eBook & Resources
Hint #1
Ask your instructor a questionCheck my work
10.
value: 1.33 points
Required information
| 6. | What is the amount of the recorded gain or loss from retiring the bonds? |
Hints
References
eBook & Resources
Hint #1
Ask your instructor a questionCheck my work
11.
value: 1.33 points
Required information
| 7. | Prepare the journal entry to record the bond retirement at January 1, 2021. |
 |
Value: 1.33 points 4. What is the carrying (book) value of the bonds and the carrying value of the 30% soon-to-be-retired bonds as of the close of business on December 31, 2020? Retired Entire 30% Group Par value Remaining discount carrying value 0
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Strategies For Small Audit Shops
Authors: David O'Regan
2nd Edition
0894134701, 978-0894134708
