On January 1, 2017, Shay issues $320,000 of 9%, 20-year bonds at a price of 96.75. Six years later, on January 1, 2023, Shay retires 25% of these bonds by buying them on the open market at 104.75. All interest is accounted for and paid through December 31, 2022, the day before the purchase. The straight-line method is used to amortize any bond discount.

1- How much does the company receive when it issues the bonds on January 1, 2017?

2- What is the amount of the discount on the bonds at January 1, 2017?

3- How much amortization of the discount is recorded on the bonds for the entire period from January 1, 2017, through December 31, 2022?

4- What is the carrying (book) value of the bonds and the carrying value of the 25% soon-to-be-retired bonds as of the close of business on December 31, 2022?

Par value, Remaining Discount, Carrying Value

Entire Group, Retired 25%

5- How much did the company pay on January 1, 2023, to purchase the bonds that it retired?

6- What is the amount of the recorded gain or loss from retiring the bonds? (Two blanks)

7- Prepare the journal entry to record the bond retirement at January 1, 2023.