Question

Required information Exercise 10-9 Straight-Line: Bond computations, amortization, and bond retirement LO P2, P4 The following information applies to the questions displayed below.) On January 1, 2017, Shay issues $330,000 of 12%, 15-year bonds at a price of 97.00. Six years later, on January 1, 2023, Shay retires 20% of these bonds by buying them on the open market at 104.50. All interest is accounted for and paid through December 31, 2022, the day before the purchase. The straight-line method is used to amortize any bond discount Exercise 10-9 Part 5 5. How much did the company pay on January 1, 2023, to purchase the bonds that it retired? Answer is complete but not entirely correct. Purchase S 43.131 price

Answer 1

Total bonds issued = $ 330,000
On January 1, 2023 Shay purchased 20% of these bonds at the rate of $ 104.50
So the company pay on January 1, 2023 to purchase these bonds
Bonds purchased of value $ 330,000 * 20% = $ 66000
Company paid at the rate of $ 104.50
So company paid total of = $ (66000 / 100 ) * 104.50 = $ 68970
Assumption - Bonds face value was $ 100 and they were issued at discount @ $ 97.