Issuance and retirement of bonds income statement

Assignment Help Accounting Basics

Reference no: EM13597185

Issuance and Retirement of Bonds; Income Statement Presentation) Holiday Company issued its 9%, 25-year mortgage bonds in the principal amount of $3,000,000 on January 2, 1996, at a discount of $150,000, which it proceeded to amortize by charges to expense over the life of the issue on a straightline basis. The indenture securing the issue provided that the bonds could be called for redemption in total
but not in part at any time before maturity at 104% of the principal amount, but it did not provide for any sinking fund.

On December 18, 2010, the company issued its 11%, 20-year debenture bonds in the principal amount of $4,000,000 at 102, and the proceeds were used to redeem the 9%, 25-year mortgage bonds on January 2, 2011. The indenture securing the new issue did not provide for any sinking fund or for retirement before maturity.

Instructions
(a) Prepare journal entries to record the issuance of the 11% bonds and the retirement of the 9% bonds.
(b) Indicate the income statement treatment of the gain or loss from retirement and the note disclosure required.

Reference no: EM13597185

Questions Cloud

Six-month t-bills have a nominal rate of 7 while default : six-month t-bills have a nominal rate of 7 while default free japanese bonds that mature in 6 months have a nominal

Accrued salaries of 4950 owed to employees for december 30 : accrued salaries of 4950 owed to employees for december 30 and 31 are not comsidered in preparing the financial

For a particular isomer of c8h18 the following reaction : for a particular isomer of c8h18 the following reaction produces 5113.3 kj of heat per mole of c8h18g consumed under

The tsetsekos company was planning to finance an expansion : the tsetsekos company was planning to finance an expansion. the principal executives of the company all agreed that an

Issuance and retirement of bonds income statement : issuance and retirement of bonds income statement presentation holiday company issued its 9 25-year mortgage bonds in

Earnings after taxes 580000 in year 2007 with 400000 : earnings after taxes 580000 in year 2007 with 400000 shares of common stock in 2008 the firm issued 35000 new shares

The change in the gibbs energy of a certain : a the change in the gibbs energy of a certain constant-pressure process was found to fit the expression deltagj -85.40

Include a description of the evidence the accounting : the audit report and internal control evaluation.bullresource pp. 62 amp 63 of ch. 3 in auditing and assurance

Hydrazine n2h4 has pkb1607 and pkb21505 draw a structural : hydrazine n2h4 has pkb16.07 and pkb215.05. draw a structural formula for hydrazine and write the two equations

User Account

All Pages