Question 15 (Mandatory) (4 points) On January 1 of Year 1, Oka Company issued an $8,000, 4%, 3-year bond. Interest is paid semiannually each July 1 and January 1. On the day the bond was issued, the market interest rate on bonds with the same degree of riskiness was 6% compounded annually. The issue price of the bond was $7,566.62. This bond was retired at 103 on July 1 of Year 1, right after the first coupon payment was made. The entry to record the retirement of this bond would include a: DEBIT to Loss on Bond Retirement of $606.38 CREDIT to Gain on Bond Retirement of $229.01 DEBIT to Loss on Bond Retirement of $673.38 DEBIT to Loss on Bond Retirement of $229.01 CREDIT to Cash of $7,633.62 DEBIT to Bonds Payable of $8,000 DEBIT to Bonds Payable of $8,240
Question 15 (Mandatory) (4 points) On January 1 of Year 1, Oka Company issued an $8,000, 4%, 3-year bond. Interest is paid semiannually each July 1 and January 1. On the day the bond was issued, the market interest rate on bonds with the same degree of riskiness was 6% compounded annually. The issue price of the bond was $7,566.62. This bond was retired at 103 on July 1 of Year 1, right after the first coupon payment was made. The entry to record the retirement of this bond would include a: DEBIT to Loss on Bond Retirement of $606.38 CREDIT to Gain on Bond Retirement of $229.01 DEBIT to Loss on Bond Retirement of $673.38 DEBIT to Loss on Bond Retirement of $229.01 CREDIT to Cash of $7,633.62 DEBIT to Bonds Payable of $8,000 DEBIT to Bonds Payable of $8,240
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Question 15 (Mandatory) (4 points)
On January 1 of Year 1, Oka Company issued an $8,000, 4%, 3-year bond. Interest is paid
semiannually each July 1 and January 1. On the day the bond was issued, the market interest rate on
bonds with the same degree of riskiness was 6% compounded annually. The issue price of the bond
was $7,566.62. This bond was retired at 103 on July 1 of Year 1, right after the first coupon payment
was made. The entry to record the retirement of this bond would include a:
DEBIT to Loss on Bond Retirement of $606.38
CREDIT to Gain on Bond Retirement of $229.01
DEBIT to Loss on Bond Retirement of $673.38
DEBIT to Loss on Bond Retirement of $229.01
CREDIT to Cash of $7,633.62
DEBIT to Bonds Payable of $8,000
DEBIT to Bonds Payable of $8,240
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