On January 1, 2021. Patty Company issued 51,00,000 of 6°, 10-year bonds for 96. Party retred...

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business accounting

Answer 1

Answer #1

Answer

Bonds were issued at a discount of $4 =$1,000,000*4/100=$40,000

Bonds are amortised on straight line basis, so amortisation for 1 year=$40,000/10

=$4,000

Bonds amortised in year 2021=$4,000

Balance of Discount on bonds on January 1 2022=$40,000-$4,000=$36,000

Loss on retirement of bonds=$1,000,000+$36,000-$1,010,000

Loss on reitrement of bonds=$26,000

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Answer 2

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