Accounting Help!!! I Am So Confused On This Homework Question! Plz Help!!!?

On January 2, 2007, Prebish Corporation issued $1,500,000 of 10% bonds at 97 due December 31, 2016. Legal and other costs of $26,000 were incurred in connection with the issue. Interest on the bonds is payable annually each December 31. The $26,000 issue costs are being deferred and amortized on a straight-line basis over the 10-year term of the bonds. 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, 2012, Prebish called $1,050,000 face amount of the bonds and retired them.
Ignoring income taxes:
(a) Compute the amount of loss, if any, to be recognized by Prebish as a result of retiring the $1,050,000 of bonds in 2012.
(b) Prepare the journal entry to record the retirement. (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)

Both comments and pings are currently closed.

Comments are closed.

Powered by WordPress | Designed by: free css template | Thanks to hostgator coupon and web hosting reviews