Norwich. Inc, Issued $2: x urse.com/platform/mod/quiz/attempt.php?attempt-170657

Question

Norwich. Inc, Issued $2: x urse.com/platform/mod/quiz/attempt.php?attempt-1706575&page; 19 ketplac Windows Media WindowsRaising cash still tou 100 Must Read Book AFIC Curre nu CLICK HERE TO REVIEW LEARNING OBJECTIVES QUESTION 20 Not yet answered Points out of 10.00 Flag question Early Retirement of Bonds Norwich, inc., issued $256,000 of 8%, 15-year bonds at 96 on June 30, 2009. Interest is payable semiannually on December 31 and June 30. Through june 30, 2015, Norwich amortized $3,000 of the bond discount. On june 30, 2015, Norwich retired the bonds at 101 (after making the Interest payment on that date). Prepare the journal entry to record the bond retirement on june 30, 2015. General Journal Description Debit ACredit s256000 $ Date Jun.30 Bonds Payable Loss on Bond Retirement e Discount on Bonds Payable Cash To retire bonds and record loss on bond retirement s page Next page SLUS

Explanation / Answer

JOURNAL ENTRY Date Accounts Title and explanations Debit $ Credit $ 30-Jun Bonds Payable Dr. 256000 Loss on bond retirement 9800     Discount on Bonds payable 7240      Cash Account 258560 (to retire bonds and loss on bonds retirement) Note: Total discount on bonds payab;e (256000*4%): $ 10240 Discount Unamortized: 10240-3000=7240

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