What amount of the gain-loss for candlestick to redeem

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Reference no: EM131967266

Problem

The Candlestick Inc. Issues 100, five-year, 10%, $ 1,000 bonds dated January 1, 2014, at 105. On January 1, 2019, Candlestick records the redemption of its bonds with face value $100,000 at maturity. Assume at the end of the third period, Candlestick Inc., having sold its bonds at a premium, retires the bonds at 101 after paying the annual interest. Assume that the carrying value of the bonds at the redemption date is $102,000 (principal $100,000 and premium $2,000).

(a) What amount of the gain/loss for Candlestick to redeem at the end of third period?
(b) Prepare journal entry for the Candlestick when it records the redemption at the end of the third period (January 1, 2017).

Reference no: EM131967266

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