On January 2, 2015, Sarasota Corporation issued $1,550,000 of 10 % bonds at 98 due December 31, 2024. Interest on the bonds is payable annually each December 31. The discount 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 101 (.e., at 101% of face amount), and on January 2, 2020, Sarasota called $930,000 face amount of the bonds and redeemed them. Ignoring income taxes, compute the amount of loss, if any, to be recognized by Sarasota as a result of retiring the $930,000 of bonds in 2020. (Round answer to O decimal places, eg. 38,548.) Loss on redemption $ Prepare the journal entry to record the redemption. (Round answers to 0 decimal places, eg. 38,548. If no entry is required, select "No Entry for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually) Date January 2. 2020 Account Titles and Explanation Cash Loss on Redemption of Bonds Discount on Bonds Payable Bonds Payable Debit 939300 0 Credit 9300 930000

On January 2, 2015, Sarasota Corporation issued $1,550,000 of 10 % bonds at 98 due December 31, 2024. Interest on the bonds is payable annually each December 31. The discount 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 101 (.e., at 101% of face amount), and on January 2, 2020, Sarasota called $930,000 face amount of the bonds and redeemed them. Ignoring income taxes, compute the amount of loss, if any, to be recognized by Sarasota as a result of retiring the $930,000 of bonds in 2020. (Round answer to O decimal places, eg. 38,548.) Loss on redemption $ Prepare the journal entry to record the redemption. (Round answers to 0 decimal places, eg. 38,548. If no entry is required, select "No Entry for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually) Date January 2. 2020 Account Titles and Explanation Cash Loss on Redemption of Bonds Discount on Bonds Payable Bonds Payable Debit 939300 0 Credit 9300 930000

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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