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On January 1, 2020, Draydon Corporation issued five-year, 6% bonds payable with a face value of $2,900,000. The bonds were issued at 89 and pay
On January 1, 2020, Draydon Corporation issued five-year, 6% bonds payable with a face value of $2,900,000. The bonds were issued at 89 and pay interest on January 1 and July 1. Draydon amortizes bond discounts using the straight-line method. On December 31, 2022, Draydon retired the bonds early by purchasing them at a market price of 94. The company's fiscal year ends on December 31. Read the requirements. ... Requirement 1. Journalize the issuance of the bonds on January 1, 2020. (Record debits first, then credits. Exclude explanations from any journal entries.) Date 2020 Jan 1 Cash Journal Entry Accounts Discount on Bonds Payable Bonds Payable Debit Credit 2700000 300000 3000000 Requirements 1. Journalize the issuance of the bonds on January 1, 2020. 2. Record the semiannual interest payment and amortization of bond discount on July 1, 2020. 3. Record the interest accrual and discount amortization on December 31, 2020. 4. Calculate the carrying value of the bonds payable on December 31, 2022, prior to their retirement. 5. Calculate the gain or loss on the retirement of the bonds payable on December 31, 2022. Indicate where this gain or loss will appear in the financial statements
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