On January 2, 2015, Cullumber Corporation issued $1,100,000 of 10% bonds at 98 due December 31, 2024. Interest on the bonds is payable annually each December 31. The discount on the bonds is also being amortized on a straight-line basis over the 10 years. (Straight-line is not materially different in effect from the preferable "interest method") The bonds are callable at 101 (i.e., at 101% of face amount), and on January 2, 2020, Cullumber called $660,000 face amount of the bonds and redeemed them. Ignoring income taxes, compute the amount of loss, if any, to be recognized by Cullumber as a result of retiring the $660,000 of bonds in 2020. (Round answer to 0 decimal places, e.g. 38,548.) Loss on redemption $ Prepare the journal entry to record the redemption. (Round answers to O decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit January 2, 2020 Sunland, Inc. had outstanding $5.820,000 of 10% bonds (interest payable July 31 and January 31) due in 10 years. On July 1, it issued $9.240,000 of 11%, 15-year bonds (interest payable July 1 and January 1) at 98.A portion of the proceeds was used to call the 10% bonds (with unamortized discount of $58,200) at 101 on August 1. Prepare the journal entries necessary to record issue of the new bonds and the refunding of the bonds. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 1 (To record issuance of 11% bonds) August 1 (To record retirement of 10% bonds) On January 2, 2015, Cullumber Corporation issued $1,100,000 of 10% bonds at 98 due December 31, 2024. Interest on the bonds is payable annually each December 31. The discount on the bonds is also being amortized on a straight-line basis over the 10 years. (Straight-line is not materially different in effect from the preferable "interest method") The bonds are callable at 101 (i.e., at 101% of face amount), and on January 2, 2020, Cullumber called $660,000 face amount of the bonds and redeemed them. Ignoring income taxes, compute the amount of loss, if any, to be recognized by Cullumber as a result of retiring the $660,000 of bonds in 2020. (Round answer to 0 decimal places, e.g. 38,548.) Loss on redemption $ Prepare the journal entry to record the redemption. (Round answers to O decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit January 2, 2020 Sunland, Inc. had outstanding $5.820,000 of 10% bonds (interest payable July 31 and January 31) due in 10 years. On July 1, it issued $9.240,000 of 11%, 15-year bonds (interest payable July 1 and January 1) at 98.A portion of the proceeds was used to call the 10% bonds (with unamortized discount of $58,200) at 101 on August 1. Prepare the journal entries necessary to record issue of the new bonds and the refunding of the bonds. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 1 (To record issuance of 11% bonds) August 1 (To record retirement of 10% bonds)
