What is the loss on redemption

Assignment Help Accounting Basics
Reference no: EM132537703

Question - On January 2, 2015, Sage Corporation issued $1,600,000 of 10% bonds at 99 due December 31, 2024. Interest on the bonds is payable annually each December 31. The discount on the bonds is also being amortized on a straight-line basis over the 10 years. (Straight-line is not materially different in effect from the preferable "interest method.")

The bonds are callable at 102 (i.e., at 102% of face amount), and on January 2, 2020, Sage called $960,000 face amount of the bonds and redeemed them.

Ignoring income taxes, compute the amount of loss, if any, to be recognized by Sage as a result of retiring the $960,000 of bonds in 2020.

What is the loss on redemption? Show the journal entry to record the redemption.

Reference no: EM132537703

Questions Cloud

Please make the appropriate entry : Junior Slick was such a pain to the other two older partners that they decided to remove him from the partnership. Please make the appropriate entry
What is opportunity cost of holding significant inventory : What is The opportunity cost of holding significant inventory includes?the interest forgone on an alternative investment/additional storage costs
Which costs always differs among future alternatives : Determine Which of the costs always differs among future alternatives? historical costs/ relevant costs/ variable costs/fixed costs
Make a diagrammatic representation of the video : Make a diagrammatic representation of the video on how the immune system respond to a disease or infection.
What is the loss on redemption : The bonds are callable at 102 (i.e., at 102% of face amount), and on January 2, 2020, What is the loss on redemption? Show the journal entry to record
What is the function of the iris diaphragm : What is the function of the iris diaphragm? What is the function of the field diaphragm?
What is the function of the iris diaphragm : What is the function of the iris diaphragm? What is the function of the field diaphragm?
What is the total magnification : What is the total magnification of the following?
Record both the depreciation values on the equipment : Record both the depreciation values on the Equipment to the date of sale and the calculations to record the sale of the Equipment

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd