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Prepare the journal entry to record the redemption

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Question - On January 2, 2015, Skysong Corporation issued $1,250,000 of 10% bonds at 97 due December 31, 2024. Interest on the bonds is payable annually each December 31. The discount on the bonds is also being amortized on a straight-line basis over the 10 years. (Straight-line is not materially different in effect from the preferable "interest method.")

The bonds are callable at 102 (i.e., at 102% of face amount), and on January 2, 2020, Skysong called $750,000 face amount of the bonds and redeemed them.

Ignoring income taxes, compute the amount of loss, if any, to be recognized by Skysong as a result of retiring the $750,000 of bonds in 2020.

Prepare the journal entry to record the redemption.

Reference no: EM132603276

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