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Post the journal entry of the given transaction

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Question: 1. Enumerate the process of issuing bonds in the organization

Section C: 1. Transatlantic Inc. issued a $1,000, 25-year bond five years ago at 11% interest. Comparable bonds yield 8% today. What should Transatlantic bond sell for now

2. At the end of the 7 years, the bonds were redeemed given the following:

Premium on Bonds Payable Balance:

Amortization: $24,924.60 * 7 years = $149,547.60

Account balance: $249,246 - 149,547.60 = $99,698.40

Bonds Payable Balance 4,000,000

Redemption Price 4,000,000 * 102% = $4,080,000.00

Carrying Value 4,000,000 + 99,698.40 = 4,099,698.40

Gain (Redemption < CV) $19,698.40

Required: Post the journal entry of the above transaction.

Reference no: EM132755009

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