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On January 1, 2013, Shay issues $290,000 of 11%, 20-year bonds at a price of 97.50. Six years later, on January 1, 2019, Shay retires 20% of these bonds by buying them on the open market at 104.50. All interest is accounted for and paid through December 31, 2018, the day before the purchase. The straight-line method is used to amortize any bond discount.

3.

value: 1.00 points

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1.	How much does the company receive when it issues the bonds on January 1, 2013?

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4.

value: 1.00 points

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2.	What is the amount of the discount on the bonds at January 1, 2013?

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5.

value: 1.00 points

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3.	How much amortization of the discount is recorded on the bonds for the entire period from January 1, 2013, through December 31, 2018?

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6.

value: 1.00 points

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4.	What is the carrying (book) value of the bonds and the carrying value of the 20% soon-to-be-retired bonds as of the close of business on December 31, 2018? (Negative amounts should be indicated by a minus sign.)

rev: 03_12_2015_QC_CS-10679

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7.

value: 1.00 points

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5.	How much did the company pay on January 1, 2019, to purchase the bonds that it retired?

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8.

value: 0.50 points

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6.	What is the amount of the recorded gain or loss from retiring the bonds? (Negative amounts should be indicated by a minus sign.)

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9.

value: 0.50 points

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7.	Prepare the journal entry to record the bond retirement at January 1, 2019.