On April 30, 2013, Winsor Company issued 8% bonds with a par value of £900,000 due in 20 years. They were issued at 82.8 to yield 10% and were callable at 102 at any date after April 30, 2021. Because of lower interest rates and a significant change in the company’s credit rating, it was decided to call the entire issue on April 30, 2022, and to issue new bonds. New 6% bonds were sold in the amount of £1,200,000 at 112.5 to yield 5%; they mature in 20 years. Interest payment dates are October 31 and April 30 for both and new bonds. Prepare journal entries to record the retirement of the old issue of bonds. Unamortized discount is £118,470.
On April 30, 2013, Winsor Company issued 8% bonds with a par value of £900,000 due in 20 years. They were issued at 82.8 to yield 10% and were callable at 102 at any date after April 30, 2021. Because of lower interest rates and a significant change in the company’s credit rating, it was decided to call the entire issue on April 30, 2022, and to issue new bonds. New 6% bonds were sold in the amount of £1,200,000 at 112.5 to yield 5%; they mature in 20 years. Interest payment dates are October 31 and April 30 for both and new bonds. Prepare journal entries to record the retirement of the old issue of bonds. Unamortized discount is £118,470.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
On April 30, 2013, Winsor Company issued 8% bonds with a par value of £900,000 due in 20 years. They were issued at 82.8 to yield 10% and were callable at 102 at any date after April 30, 2021. Because of lower interest rates and a significant change in the company’s credit rating, it was decided to call the entire issue on April 30, 2022, and to issue new bonds. New 6% bonds were sold in the amount of £1,200,000 at 112.5 to yield 5%; they mature in 20 years. Interest payment dates are October 31 and April 30 for both and new bonds.
Prepare
No hand written and fast answer with explanation
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education