Question
Sage Hill Inc. had outstanding $11,000,000 of 8.25% bonds (interest payable March 31 and September 30) due in 12 years. Sage Hill was able to
Sage Hill Inc. had outstanding $11,000,000 of 8.25% bonds (interest payable March 31 and September 30) due in 12 years. Sage Hill was able to reduce its risk rating through investing in more real estate. As a result, on September 1, it issued $6,000,000 of 10-year, 6% bonds (interest payable July 1 and January 1) at 97. The proceeds plus additional cash was used to call the 8.25% bonds at 106 on October 1. The unamortized bond discount for the 8.25% bonds was $1,052,000 on October 1. Sage Hill prepares financial statements in accordance with IFRS. Prepare the necessary journal entries to record the issue of the new bonds and the retirement of the old bonds. (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 to record issuance of bonds | enter a debit amount | enter a credit amount |
enter an account title to record issuance of bonds | enter a debit amount | enter a credit amount |
(To record issuance of 6% bonds) | ||
enter an account title to record retirement of bonds | enter a debit amount | enter a credit amount |
enter an account title to record retirement of bonds | enter a debit amount | enter a credit amount |
enter an account title to record retirement of bonds | enter a debit amount | enter a credit amount |
(To record retirement of 8.25% |
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