On January 1, 2021, Shay Company issues $350,000 of 10%, 15-year bonds. The bonds sell for $342,125. Six years later, on January 2027, Shay retires these bonds by buying them on the open market for $365,750. All interest is accounted for and paid through December 31, 2026, the day before the purchase. The straight-line method is used to amortize any bond discount. 1. What is the amount of the discount on the bonds at issuance? 2. How much amortization of the discount is recorded on the bonds for the entire period from January 1, 2021, through December 3 2026? 3. What is the carrying (book) value of the bonds as of the close of business on December 31, 2026? Prepare the journal entry to record the hond retirement

On January 1, 2021, Shay Company issues $350,000 of 10%, 15-year bonds. The bonds sell for $342,125. Six years later, on January 2027, Shay retires these bonds by buying them on the open market for $365,750. All interest is accounted for and paid through December 31, 2026, the day before the purchase. The straight-line method is used to amortize any bond discount. 1. What is the amount of the discount on the bonds at issuance? 2. How much amortization of the discount is recorded on the bonds for the entire period from January 1, 2021, through December 3 2026? 3. What is the carrying (book) value of the bonds as of the close of business on December 31, 2026? Prepare the journal entry to record the hond retirement

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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