RWL Ltd$.$ sold $$7,060,000$ of $12\%$ bonds, which were dated March $1,2023,$ on June $1,2023.$ The bonds paid interest on September $1$ and March $1$ of each year. The bonds' maturity date was March $1,2033,$ and the bonds were issued to yield $14\%.$ RWL$\text{'}$s fiscal year$-$end was February $28,$ and the company followed IFRS.

On June $1,2024,$ RWL bought back $$3,060,000$ worth of bonds for $$2,960,000$ plus accrued interest.

$($a$)$

Your Answer

Correct Answer

Your answer is partially correct.

Using $1.$ a financial calculator, or $2.$ Excel function PV$,$ calculate the issue price of the bonds and prepare the entry for the issuance of the bonds. Hint: Use the account Interest Expense in your entry$).($Round answer to $0$ decimal places, e$.$g$.5,275.$ 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 $0$ for the amounts. List all debit entries before credit entries.$)$

Account Titles and Explanation

Debit

Credit

enter an account title

Cash

Correct answer

enter a debit amount

$6312062\mathrm{.}59$

Incorrect answer

enter a credit amount

Incorrect answer

enter an account title

Loss on Retirement of Bonds

Incorrect answer

enter a debit amount

$747937\mathrm{.}41$

Incorrect answer

enter a credit amount

Incorrect answer

enter an account title

Bonds Payable

Correct answer

enter a debit amount

Incorrect answer

enter a credit amount

$7060000$

Incorrect answer

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List of AccountsAssistance Used

Attempts: $3$ of $3$ used

$($b$)$

Your answer is incorrect.

Using $1.$ a financial calculator, or $2.$ Excel function PV$,$ calculate the carrying amount of the bond on September $1,2023.$ Use the change in the carrying amount as the amount of amortization of the discount to be recorded in the entry for the first payment. $($Round answer to $0$ decimal places, e$.$g$.5,275.)$

Carrying amount of the bond

$enter the carrying amount of the bond in dollars

$6,321,031$

Incorrect answer