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Prepare the journal entry for the redemtion of the bonds

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Reference no: EM132918860

QUESTION - On October 1, 2020 Vision Inc. issued bonds with a maturity value of $5 million when the market rate of interest was 3%. The bonds have a contractual rate of interest of 5% and mature on October 1, 2025. Interest on the bonds is payable semi-annually on April 1 and on October 1 each year. The company's yearend is December 31.

REQUIRED -

A. Calculate the bonds issue price.

B. Prepare a bond amortization schedule.

C. Prepare all of the required journal entries related to the bonds that Vision Inc. will record for 2020 and 2021 including any adjusting journal entries for 2020 and 2021.

D. One half of the bonds were redeemed on April 1, 2022 (after the interest had been paid and recorded) at 98. Prepare the journal entry for the redemtion of the bonds.

E. Record the bond retirement on October 1, 2025 (immediately after the last interest payment had been made and recorded).

Reference no: EM132918860

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