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On January 1, 2021, Carla Vista Ltd. issued $480,000 of 5%, 5-year bonds. The bonds were issued to yield a market interest rate of 6%.
On January 1, 2021, Carla Vista Ltd. issued $480,000 of 5%, 5-year bonds. The bonds were issued to yield a market interest rate of 6%. Carla Vista's year end is December 31. On January 1, 2023 immediately after making and recording the semi-annual interest payment, Carla Vista redeemed the bonds. A partial bond amortization schedule is presented below. Semi-Annual Interest Interest Bond Interest Period Payment Expense Amortization Amortized Cost Jan 1, 2021 $459,528 July 1, 2021 12,000 $13786 $1.786 461,314 Jan 1.2022 12,000 13,839 1.839 463,153 July 1.2022 12.000 13,895 1,895 465,048 Jan 1, 2023 12.000 13,951 1,951 466.999 Prepare the journal entry to record the redemption of the bonds assuming they were redeemed at 100 on January 1, 2023 (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 1 Bonds Payable 480000 Loss on Bond Redemption 13001 Cash (To record redemption of bonds.) List of Accounts Prepare the Journal entry to record the redemption of the bonds assuming they were redeemed at 95. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 1 Bonds Payable 480000 Gain on Bond Redemption Cash (To record redemption of bonds.)
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