Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. on january 1,2020 , larkspur corporation issued $2

On January 1,2020 , Larkspur Corporation issued $2,790,000,5-year, 8% bonds at 97 . The bonds...

80.2K

Verified Solution

Question

Accounting

image
On January 1,2020 , Larkspur Corporation issued $2,790,000,5-year, 8% bonds at 97 . The bonds pay interest annually on January 1 . By January 1,2022, the market rate of interest for bonds of risk similar to those of Larkspur Corporation had risen. As a result, the market price of these bonds was $2,325,000 on January 1,2022 -below their carrying value of $2,739,780. Geoff Marquis, president of the company, suggests repurchasing all of these bonds in the open market at the $2,325,000 price. But to do so the company will have to issue $2,325,000 (face value) of new 10 -year, 12% bonds at par. The president asks you, as controller, "What is the feasibility of my proposed repurchase plan?" Answer the following. (a) Prepare the journal entry to redeem the 5-year bonds on January 1,2022. (Credit account titles are automotically indented when the amount is entered. Do not indent manually.)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Geometry
1.2K views

O A baseball diamond is a square with sides of 90 feet What is the...

Physics
1.2K views

A satellite of mass 180 kg is placed into Earth orbit at a height of 850...

Physics
1.2K views

2 A parallel plate capacitor is charged by a battery as shown in the figure...

Physics
1.2K views

An application of Kirchhoff s Rules to the circuit shown results in the following system...

Physics
1.2K views

64 A point charge q is placed at the centre of a non concentric cavity...

Basic Math
1.2K views

Which choice is equivalent to log73m 2x A 282x 12m B 288x 48m 4 7...

Algebra
1.2K views

6 Sketch a graph of the function a x 2 x 4 Describe the transformations...

Algebra
1.2K views

dd and simplify 7 3i 6 2i 7 3i 6 2i Simplify your answer Type...

Accounting
1.2K views

Apple Incorporated (AI) board of directors has indicated that they will repurchase AIs stock effective...

Accounting
1.2K views

a. Raw materials purchased on account, $290,000. . Raw materials used in production...

Accounting
1.2K views

Diamond Toaster Company Volume analysis Selling Price Per toaster 350 Material Cost Per toaster 210...

Accounting
1.2K views

The Monty Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase...