Question
QUESTION How do I obtain the carrying amount of bonds payable Loss On retirement of Bonds Payable And Discount on bonds payable? Seaview Magazine $390,000
QUESTION
How do I obtain the carrying amount of bonds payable
Loss On retirement of Bonds Payable
And Discount on bonds payable?
Seaview Magazine $390,000 of 15-year, 8% callable bonds payable on July 31,
20182018, at 99. On July 31, 2021 Seaview called the bonds at
102.
Assume annual interest payments.
Requirements
1. | Without making journal entries, compute the carrying amount of the bonds payable at July 31, 2021 |
2. | Assume all amortization has been recorded properly. Journalize the retirement of the bonds on July 31, 2021 No explanation is required. |
Requirement 1. Without making journal entries, compute the carrying amount of the bonds payable at July 31,
20212021.
(Assume bonds payable are amortized using thestraight-line amortization method.)
First, complete the sentence below.
The carrying amount of the bonds payable at issuance (July 31, 2018) is $ | 386,100 | . The | discount | on the bonds at | |||||
issuance amounts to $ | 3,900 | . | |||||||
The carrying amount of the bonds payable at July 31, 2021 is $ | 386,880 | . |
| ||||||
Requirement 2. Assume all amortization has been recorded properly. Journalize the retirement of the bonds on July 31,
20212021.
No explanation is required. (Record debits first, then credits. Exclude explanations from any journal entries.)
Date | Accounts | Debit | Credit | ||
2021 |
|
|
| ||
Jul. 31 | Bonds Payable | 390,000 |
| ||
|
|
| Loss on Retirement of Bonds Payable | 10,920 |
|
|
|
| Cash |
| 397,800 |
|
|
| Discount on Bonds Payable |
| 3,120 |
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