Chapter 14, Problem 14.1P

a.

To determine

The issue price of the debt.

Given information:

Company issued bonds worth $700,000 at Par.

Term period for conversion is 4 years

Market rate of interest is 4%.

Cost of issuing bonds is $3,600.

Bonds retired early for $655,000.

b.

To determine

To prepare: The amortization table for the bond issue.

c.

To determine

To prepare: The journal for recording issuing bond and the entry as on 31^st December, 2016.

d.

To determine

The effects of the bond issue and the amortization of discount in income statement, cash flow statement and balance sheet of year 2016.

e.

To determine

To prepare: The journal for recording early retirement of bond on November 30, 2019.