Prepare the necessary journal entries to record the issue

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Jyoti Inc. had outstanding $10 million of 8% bonds (interest payable March 31 and October 31) due in 12 years. Jyoti was able to reduce its risk rating through investing in more real estate. As a result, on September 1, it issued $5 million of 10-year, 6% bonds (interest payable July 1 and January 1) at 97. A portion of the proceeds was used to call the 8% bonds at 105 on October 1. The unamortized bond discount for the 8% bonds was $1.1 million on October 1. Jyoti prepares fi nancial statements in accordance with IFRS.

Problem 1: Prepare the necessary journal entries to record the issue of the new bonds and the retirement of the old bonds.

Reference no: EM132773161

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