On January 1, 2020, Bridgeport Corporation issued $5,180,000 of 10% bonds at 102 due December 31, 2029. Bridgeport paid $74,000 in bond issue costs when the bonds were issue to the market. These will be amortized over the life of the bond. The premium on the bonds is also being amortized on a straight-line basis over the 10 years. (Straight-line is not materially different in effect from the preferable “interest method”.) The bonds are callable at 106 (i.e., at 106% of face amount), and on January 2, 2025, Bridgeport called one-half of the bonds and retired them. Ignoring income taxes, compute the amount of loss, if any, to be recognized by Bridgeport as a result of retiring the $2,590,000 of bonds in 2025. Loss on redemption $enter the amount of loss on redemption in dollars Prepare the journal entry to record the retirement
On January 1, 2020, Bridgeport Corporation issued $5,180,000 of 10% bonds at 102 due December 31, 2029. Bridgeport paid $74,000 in bond issue costs when the bonds were issue to the market. These will be amortized over the life of the bond. The premium on the bonds is also being amortized on a straight-line basis over the 10 years. (Straight-line is not materially different in effect from the preferable “interest method”.)
The bonds are callable at 106 (i.e., at 106% of face amount), and on January 2, 2025, Bridgeport called one-half of the bonds and retired them.
Ignoring income taxes, compute the amount of loss, if any, to be recognized by Bridgeport as a result of retiring the $2,590,000 of bonds in 2025.
| Loss on redemption | $enter the amount of loss on redemption in dollars |
Prepare the
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