Oct 1, 2023:Record the retirement of bond for $883,000.Record the retirement of bond for $887,879.Record the retirement of bond for $890,900. Exercise 14-20 Retiring bonds for cash LO7Solar Energy Inc. issued a $904,000, 7.0%, five-year bond on October 1, 2020. Interest is paid annually each October 1. Solar's year-end is December 31.CashPeriodPeriod EndingInterestInterestDiscountUnamortizedCarryingPaidExpenseAmort.DiscountValue$867,906874,058880,703887,879895,629Oct. 1/20$36,094$ 63,280$ 69,432$ 6,1526,6457,1767,7508,370$36,094Oct. 1/2129,942Oct. 1/2263,28063,28063,28063, 28069,92570,45671,03071,65023,29716,1218,371Oct. 1/23Oct. 1/24Oct. 1/25904,000$316,400$352,494Assume that interest has already been paid on October 1, 2023.Required:Using the amortization schedule provided above, record the entry to retire the bonds on October 1, 2023, for cash of:a. $883,000b. $887,879c. $890,900

If bonds are retired before maturity, there may be gain or loss on retirement. If the bond is…

Answered: Required: Using the amortization…

Required: Using the amortization schedule provided above, record the entry to retire the bonds on October 1, 2023, for cash of: a. $883,000 b. $887,879 c. $890,900

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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Question

Oct 1, 2023:

Record the retirement of bond for $883,000.

Record the retirement of bond for $887,879.

Record the retirement of bond for $890,900.

Exercise 14-20 Retiring bonds for cash LO7
Solar Energy Inc. issued a $904,000, 7.0%, five-year bond on October 1, 2020. Interest is paid annually each October 1. Solar's year-
end is December 31.
Cash
Period
Period Ending
Interest
Interest
Discount
Unamortized
Carrying
Paid
Expense
Amort.
Discount
Value
$867,906
874,058
880,703
887,879
895,629
Oct. 1/20
$36,094
$ 63,280
$ 69,432
$ 6,152
6,645
7,176
7,750
8,370
$36,094
Oct. 1/21
29,942
Oct. 1/22
63,280
63,280
63,280
63, 280
69,925
70,456
71,030
71,650
23,297
16,121
8,371
Oct. 1/23
Oct. 1/24
Oct. 1/25
904,000
$316,400
$352,494
Assume that interest has already been paid on October 1, 2023.
Required:
Using the amortization schedule provided above, record the entry to retire the bonds on October 1, 2023, for cash of:
a. $883,000
b. $887,879
c. $890,900

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