Kershaw Electric sold $6,000,000, 10%, 15-year bonds on January 1, 2017. The bon
ID: 2478064 • Letter: K
Question
Kershaw Electric sold $6,000,000, 10%, 15-year bonds on January 1, 2017. The bonds were dated January 1, 2017, and paid interest on January 1. The bonds were sold at 98. Prepare the journal entry to record the issuance of the bonds on January 1, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. At December 31, 2017, $8,000 of the Discount on Bonds Payable account has been amortized. Show the balance sheet presentation of the long-term liability at December 31, 2017. (Enter account name only and d On January 1, 2019, when the carrying value of the bonds was $5,896,000, the company redeemed the bonds at 102. Record the redemption of the bonds assuming that interest for the period has already been paid. not indent manually.)Explanation / Answer
part 2)
BONDS PAYABLE $6000000
Less: discounts (112000) 5888000
# since 8000 is amortised Now remaining discount = 120000-8000= $112000
Part 3 )
Bonds payable Dr 6000000
loss on redemption Dr 224000
Cash Cr 6120000
bond dicount CR 104000
LOSS ON REDEMPTION = 6120000- 5896000= $224000
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