Holiday Company issued its 9%, 25-year mortgage bonds in the
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Holiday Company issued its 9%, 25-year mortgage bonds in the principal amount of $3,000,000 on January 2, 1996, at a discount of $150,000, which it proceeded to amortize by charges to expense over the life of the issue on a straight-line basis. The indenture securing the issue provided that the binds could be called for redemption in total but not in part at any time before maturity at 104% of the principal amount, but it did not provide for any sinking fund.
On December 18, 2010, the company issued its 11%, 20-year debenture bonds in principal amount of $4,000,000 at 102, and the proceeds were used to redeem the 9%, 25-year mortgage binds on January 2, 2011. The indenture securing the new issue did not provide for any sinking fund or for retirement before maturity.
(a) Prepare journal entries to record the issuance of 11% bonds and the retirement of the 9% bonds.
(b) Indicate the income statement of the gain or loss from retirement ad the note disclosure required.
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Holiday Company issued its 9%, 25-year mortgage bonds in the principal amount of $3,000,000 on January 2, 1996, at a discount of $150,000, which it proceeded to amortize by charges to expense over the life of the issue on a straight-line basis. The indenture securing the issue provided that the binds could be called for redemption in total but not in part at any time before maturity at 104% of the principal amount, but it did not provide for any sinking fund.
On December 18, 2010, the company issued its 11%, 20-year debenture bonds in principal amount of $4,000,000 at 102, and the proceeds were used to redeem the 9%, 25-year mortgage binds on January 2, 2011. The indenture securing the new issue did not provide for any sinking fund or for retirement before maturity.
(a) Prepare journal entries to record the issuance of 11% bonds and the retirement of the 9% bonds.
(b) Indicate the income statement of the gain or loss from retirement ad the note disclosure required.
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Holiday Company issued its 9%, 25-year mortgage bonds in the principal amount of $3,000,000 on January 2, 1996, at a discount of $150,000, which it proceeded to amortize by charges to expense over the life of the issue on a straight-line basis. The ...
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