Tamarisk Inc. had outstanding $11,000,000 of 8.25% bonds (interest payable March 31 and September 30) due in 12 years. Tamarisk was able to reduce its risk rating through investing in more real estate. As a result, on September 1, it issued $6,000,000 of 10-year, 6% bonds (interest payable July 1 and January 1) at 96. The proceeds plus additional cash was used to call the 8.25% bonds at 105 on October 1. The unamortized bond discount for the 8.25% bonds was $1,227,000 on October 1. Tamarisk prepares financial statements in accordance with IFRS. Prepare the necessary journal entries to record the issue of the new bonds and the retirement of the old bonds. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Cash Bonds Payable (To record issuance of 6% bonds) Bonds Payable Loss on Redemption of Bonds Cash (To record retirement of 8.25% bonds) Debit 11000000 2258250 Credit 11000000 12031250
Tamarisk Inc. had outstanding $11,000,000 of 8.25% bonds (interest payable March 31 and September 30) due in 12 years. Tamarisk was able to reduce its risk rating through investing in more real estate. As a result, on September 1, it issued $6,000,000 of 10-year, 6% bonds (interest payable July 1 and January 1) at 96. The proceeds plus additional cash was used to call the 8.25% bonds at 105 on October 1. The unamortized bond discount for the 8.25% bonds was $1,227,000 on October 1. Tamarisk prepares financial statements in accordance with IFRS. Prepare the necessary journal entries to record the issue of the new bonds and the retirement of the old bonds. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Cash Bonds Payable (To record issuance of 6% bonds) Bonds Payable Loss on Redemption of Bonds Cash (To record retirement of 8.25% bonds) Debit 11000000 2258250 Credit 11000000 12031250
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
287.
Subject : - Accounting
Transcribed Image Text:Tamarisk Inc. had outstanding $11,000,000 of 8.25% bonds (interest payable March 31 and September 30) due in 12 years. Tamarisk
was able to reduce its risk rating through investing in more real estate. As a result, on September 1, it issued $6,000,000 of 10-year, 6%
bonds (interest payable July 1 and January 1) at 96. The proceeds plus additional cash was used to call the 8.25% bonds at 105 on
October 1. The unamortized bond discount for the 8.25% bonds was $1,227,000 on October 1. Tamarisk prepares financial statements
in accordance with IFRS.
Prepare the necessary journal entries to record the issue of the new bonds and the retirement of the old bonds. (Credit account titles are
automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and
enter o for the amounts. List all debit entries before credit entries.)
Account Titles and Explanation
Cash
Bonds Payable
(To record issuance of 6% bonds)
Bonds Payable
Loss on Redemption of Bonds-
Cash
(To record retirement of 8.25% bonds)
Debit
11000000
2258250
Credit
11000000
12031250
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