Question

On January 1, 2020, Siamese Inc. redeemed its 15-year, $600,000 par value bonds at 103. They...

On January 1, 2020, Siamese Inc. redeemed its 15-year, $600,000 par value bonds at 103. They were originally issued on January 1, 2008 at 98 with a maturity date of January 1, 2023. Siamese amortizes bond discounts and premiums using the straight-line method.

Ignoring income taxes, what amount of loss should Siamese recognize on the redemption of these bonds?

$39,600

$18,000

$20,400

$9,600
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Par value of bonds 600000
Issue price of bonds (600000*98%) 588000
Total discount 12000
Divide: Years of maturity 15
Annual amortization of discount 800
Multiply: Years expired till 01.01.20 12
Discount amortized 9600
Unamortized discount (12000-9600) 2400
Carrying value of bonds payable (600000-2400) 597600
Redemption value of bonds on 01.01.20 618000
(600000*103%)
Loss on redemption of bonds on 01.01.20 20400
Answer is $ 20400
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The Cinci Company issues $100,000, 10% bonds at 103 on April 1, 2020. The bonds are...
The Cinci Company issues $100,000, 10% bonds at 103 on April 1, 2020. The bonds are dated January 1, 2020 and mature six years from that date. Straight-line amortization is used. Interest is paid annually each December 31. Compute the bond carrying value as of December 31, 2023. Answer $_______________
On January 1, Year 1, Jones Company issued bonds with a $190,000 face value, a stated...
On January 1, Year 1, Jones Company issued bonds with a $190,000 face value, a stated rate of interest of 8.0%, and a 5-year term to maturity. The bonds were issued at 97. Interest is payable in cash on December 31st of each year. The company amortizes bond discounts and premiums using the straight-line method. What is the total amount of liabilities shown on Jones' balance sheet at December 31, Year 1?
The following are independent situations. 1. Marigold Corp. redeemed $132,000 face value, 13% bonds on June...
The following are independent situations. 1. Marigold Corp. redeemed $132,000 face value, 13% bonds on June 30, 2020, at 107. The carrying value of the bonds at the redemption date was $117,500. The bonds pay annual interest, and the interest payment due on June 30, 2020, has been made and recorded. 2. Cullumber Company redeemed $170,000 face value, 18% bonds on June 30, 2020, at 98. The carrying value of the bonds at the redemption date was $171,000. The bonds...
On May 1, 2018 Small Inc issued $600,000 of 4% 10 year convertible bonds at 103....
On May 1, 2018 Small Inc issued $600,000 of 4% 10 year convertible bonds at 103. Each $1,000 bond is convertible into 20 of Small's common shares. Bonds without conversion feature would have sold at 101. Interest payments for the bonds are made on April 30 each year. (Small's year end). On May 1, 2020 30% of the bonds were converted. Prepare the journal entries to record the issuance of the convertible bonds on May 1 2018 and the conversion...
A company issued $600,000 of 13%, ten-year convertible bonds on January 1, 2020 at 107, with...
A company issued $600,000 of 13%, ten-year convertible bonds on January 1, 2020 at 107, with interest payable July 1 and January 1. Bond discount/premium is amortized semiannually on a straight-line basis. How much interest expense should the company record on June 30, 2020? (If there is no interest expense to be recorded, then enter 0.)
Capital Company issued $600,000, 10%, 20-year bonds on January 1, 2014, at 103. Interest is payable...
Capital Company issued $600,000, 10%, 20-year bonds on January 1, 2014, at 103. Interest is payable semiannually on July 1 and January 1. Capital uses the straight-line method of amortization and has a calendar year end. Instructions Prepare all (3) journal entries made in 2014 related to the bond issue. PLEASE show the journal entry for payment of interest
On January 1, 2020, Sro Company issued ten convertible bonds with a par value of $8,000...
On January 1, 2020, Sro Company issued ten convertible bonds with a par value of $8,000 per bond in market for $82,000 in total. Each bond is convertible into 800 ordinary shares of $3 per ordinary share par value. The bonds have a four-year life and a stated interest rate of 8% payable annually. The market interest rate for similar non-convertible bonds on January 1, 2020, is 9%. c. Assume that the bond matured on December 31, 2023 and Sro...
January 1, 2019 ABEF company issued 5-year bonds with a par value of $1,000,000 and a...
January 1, 2019 ABEF company issued 5-year bonds with a par value of $1,000,000 and a 6% annual stated rate of interest. The issue price of the bond was $950,000. Interest payments are made semiannually. Any premiums or discounts should amortized using the straight line method. (Remember when amortizing pay attention to how many periods) Prepare Journal Entries for the following A) Record the issuance of the bonds B) Record interest expense at June 30, 2019 C) Record interest expense...
On January 1, 2020, Larkspur Inc. issued $580,000 of 4-year, 4% bonds to yield a market...
On January 1, 2020, Larkspur Inc. issued $580,000 of 4-year, 4% bonds to yield a market interest rate of 5%. Interest is paid every quarter on January 1, April 1, July 1, and October 1. Larkspur has a calendar year end. After recording the December 31, 2021 accrual for quarterly interest, and making the payment on January 1, 2022, all the bonds were redeemed at 103. (a) Use Excel or a financial calculator to determine how much the company received...
On January 1, 2020, JWS Corporation issued $600,000 of 7% bonds, due in 10 years. The...
On January 1, 2020, JWS Corporation issued $600,000 of 7% bonds, due in 10 years. The bonds were issued for $559,231, and pay interest each July 1 and January 1. JWS uses the effective-interest method. Prepare the company’s journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Assume an effective-interest rate of 8%. No. Date Account Titles and Explanation Debit Credit (a) (b) (c)
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT