Case 1On January 1, 20x1, Kagevama Corporation issues P1,500,000 of 10% bonds at 97 due December 31,2x10. Legal and other costs of P24,000 were incurred in connection with the issue. Interest on thebonds is payableannually each December 31. The P24,000 issue costs are being deferred andamortized on a straight-line basisover the 10-year term of the bonds. The discount on the bonds isalso being amortized on a straight-line basisover 10 years.The bonds are callable at 10, and on January 2, 20x6, Kagevama called P900,000 face amount of thebondsand retired them.Unamortized discount on January 2, 20x6Unamortized bond issue costs on January 2, 20x6Loss on bond redemption,Prepare journal entry to record the retirement.

A callable bond is a bond which can be retired before its maturity.

On January 1, 20x1, Kageyama Corporation i 2x10. Legal and other costs of P24,000 were bonds is payableannually each December 31. amortized on a straight-line basisover the 10 also being amortized on a straight-line basis The bonds are callable at 10, and on Januany bondsand retired them. Unamortized discount on January 2,=

On January 1, 20x1, Kageyama Corporation i 2x10. Legal and other costs of P24,000 were bonds is payableannually each December 31. amortized on a straight-line basisover the 10 also being amortized on a straight-line basis The bonds are callable at 10, and on Januany bondsand retired them. Unamortized discount on January 2,=

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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