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Marin Inc. had outstanding $8,000,000 of 8.25% bonds (interest payable March 31 and September 30) due in 12 years. Marin was able to reduce its risk rating through investing in more real estate. As a result, on September 1, it issued $3,000,000 of 10-year, 6% bonds (interest payable July 1 and January 1) at 100. The proceeds plus additional cash was used to call the 8.25% bonds at 105 on October 1. The unamortized bond discount for the 8.25% bonds was $979,000 on October 1. Marin 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 O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit Cash Bonds Payable (To record issuance of 6% bonds) Bonds Payable Loss on Redemption of Bonds Cash (To record retirement of 8.25% bonds) 3000000 10832000 3000000 7832000 3000000

Marin Inc. had outstanding $8,000,000 of 8.25% bonds (interest payable March 31 and September 30) due in 12 years. Marin was able to reduce its risk rating through investing in more real estate. As a result, on September 1, it issued $3,000,000 of 10-year, 6% bonds (interest payable July 1 and January 1) at 100. The proceeds plus additional cash was used to call the 8.25% bonds at 105 on October 1. The unamortized bond discount for the 8.25% bonds was $979,000 on October 1. Marin 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 O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit Cash Bonds Payable (To record issuance of 6% bonds) Bonds Payable Loss on Redemption of Bonds Cash (To record retirement of 8.25% bonds) 3000000 10832000 3000000 7832000 3000000

FINANCIAL ACCOUNTING
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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Marin Inc. had outstanding $8,000,000 of 8.25% bonds (interest payable March 31 and September 30) due in 12 years. Marin was able to reduce its risk rating through investing in more real estate. As a result, on September 1, it issued $3,000,000 of 10-year, 6% bonds (interest payable July 1 and January 1) at 100. The proceeds plus additional cash was used to call the 8.25% bonds at 105 on October 1. The unamortized bond discount for the 8.25% bonds was $979,000 on October 1. Marin 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 O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit Cash Bonds Payable (To record issuance of 6% bonds) Bonds Payable Loss on Redemption of Bonds Cash (To record retirement of 8.25% bonds) 3000000 10832000 3000000 7832000 3000000
Transcribed Image Text:Marin Inc. had outstanding $8,000,000 of 8.25% bonds (interest payable March 31 and September 30) due in 12 years. Marin was able to reduce its risk rating through investing in more real estate. As a result, on September 1, it issued $3,000,000 of 10-year, 6% bonds (interest payable July 1 and January 1) at 100. The proceeds plus additional cash was used to call the 8.25% bonds at 105 on October 1. The unamortized bond discount for the 8.25% bonds was $979,000 on October 1. Marin 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 O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit Cash Bonds Payable (To record issuance of 6% bonds) Bonds Payable Loss on Redemption of Bonds Cash (To record retirement of 8.25% bonds) 3000000 10832000 3000000 7832000 3000000
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