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On January 1, 2021, Shay Company issues $410,000 of 12%, 20-year bonds. The bonds sell for $399,750. Six years later, on January 1, 2027, Shay

On January 1, 2021, Shay Company issues $410,000 of 12%, 20-year bonds. The bonds sell for $399,750. Six years later, on January 1, 2027, Shay retires these bonds by buying them on the open market for $430,500. All interest is accounted for and paid through December 31, 2026, the day before the purchase. The straight-line method is used to amortize any bond discount.

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