AMC Entertainment, Inc. owns and operates movie theaters worldwide. Assume the c

Question

AMC Entertainment, Inc. owns and operates movie theaters worldwide. Assume the company issued 5 percent bonds at their $53,500,000 face value and then used all of these cash proceeds to retire bonds with a stated interest rate of 7 percent. At that time, the 7 percent bonds had a carrying value of $50,000,000. Required: 1. Prepare the journal entries to record the issuance of the 5 percent bonds and the early retirement of the 7 percent bonds. Assume both sets of bonds were issued at face value. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list 1 Record the issuance of 5 percent bonds in the amount of $53,500,000. O. 2 Record the retirement of the 7 percent bonds which has a carrying value of $50,000,000.

Explanation / Answer

1 Cash 53500000       Bonds payable 53500000 2 Bonds payable 50000000 Loss on redemption of bonds 3500000         Cash 53500000

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