Reference no: EM131215642
On January 2, 2012, Nash Corporation issued $1,550,000 of 10% bonds at 98 due December 31, 2021. 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 101 (i.e., at 101% of face amount), and on January 2, 2017, Nash called $930,000 face amount of the bonds and redeemed them.
Ignoring income taxes, compute the amount of loss, if any, to be recognized by Nash as a result of retiring the $930,000 of bonds in 2017.
1. What is the Loss On Redemption?
2. Prepare the journal entry to record the redemption.
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: On January 2, 2012, Nash Corporation issued $1,550,000 of 10% bonds at 98 due December 31, 2021. 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...
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