Hw13 HW10#13: BONDS ISSUED AT DISCOUNT a face value of $600,000. The bonds carry

Question

Hw13 HW10#13: BONDS ISSUED AT DISCOUNT a face value of $600,000. The bonds carry a stated interest o January 1, 2017, Hannigan Company issued bonds with AND PREMIUM: On f 7% payable each January 1 . 8 POINTS Issuance assuming the bonds are issued at 97. What is the issuance price of the bond? What is the unamortized discount on the bond?'s_ b. Determine the price of issuance assuming the bonds are issued at 102. bond? What is the issuance price of the What is the unamortized premium on the bond? S EX 14 E xi i 4 REDEMPTION OF BONDS ISSUED AT DISCOUNT: Shannon Company is ued $1,000,000, 8% 10-yea bonds on December 31, 2017, for $960,000. Interest is payable annually on December 31. Shannon uses the straight-line method to amortize bond discount. 5 POINTS Instructions Prepare the journal entries to record the following events. (a) The issuance of the bonds. (b) The payment of interest and the discount amortized at December 31, 2018. (c) The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded.

Explanation / Answer

HW13)
a)Issuance price of the bond=(97/100)*600000=582000
Unamortized discount on the bond= face value-issued price
=600000-582000=18000
b)Issuance price of the bond=(102/100)*600000=612000
Unamortized discount on the bond= issued price-face value
=612000-600000=12000

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