Hurst, Inc. sold its 8% bonds with a maturity value of $9,000,000 on August 1, 2019 for $8,838,000. At the time of the sale the bonds had 5 years until they reached maturity. Interest on the bonds is payable semiannually on August 1 and February 1. The bonds are callable at 104 at any time after August 1, 2021. On October 1, 2021, Hurst decides to reacquire $1,500,000 of its 8% bonds at 101. The remainder of the outstanding bonds is reacquired by exercising the bonds' existing call feature.

Hurst, Inc. sold its 8% bonds with a maturity value of $9,000,000 on August 1, 2019 for $8,838,000. At the time of the sale the bonds had 5 years until they reached maturity. Interest on the bonds is payable semiannually on August 1 and February 1. The bonds are callable at 104 at any time after August 1, 2021. On October 1, 2021, Hurst decides to reacquire $1,500,000 of its 8% bonds at 101. The remainder of the outstanding bonds is reacquired by exercising the bonds' existing call feature.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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