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The following is taken from Spacecraft Corp.s balance sheet at December 31, 2016. Current liabilities Interest payable $ 92,500 Long-term liabilities Bonds payable (7%, due

The following is taken from Spacecraft Corp.s balance sheet at December 31, 2016.

Current liabilities
Interest payable $ 92,500
Long-term liabilities
Bonds payable (7%, due January 1, 2027) $4,200,000
Less: Discount on bonds payable 42,000 4,158,000

Interest is payable annually on January 1. The bonds are callable on any annual interest date. Spacecraft uses straight-line amortization for any bond premium or discount. From December 31, 2016, the bonds will be outstanding for an additional 10 years (120 months).

So far, I have debited bond payable for 700,000 and credit cash for 714,000. I do not understand how to calculate the loss of bond redemption and the discount on bonds payable.

(c) Assume on January 1, 2018, after paying interest, that Spacecraft. calls bonds having a face value of $700,000. The call price is 102. Record the redemption of the bonds and then prepare the adjusting entry at Dec 31, 2018 to amortize bond discount and to accrue interest on the remaining bonds.

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