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  3. on june 30, 2013, pronghorn limited issued 12.5% b

On June 30, 2013, Pronghorn Limited issued 12.5% bonds with a par value of $770,000...

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Accounting

On June 30, 2013, Pronghorn Limited issued 12.5% bonds with a par value of $770,000 due in 20 years. They were issued at 99 and were callable at 102 at any date after June 30, 2020. Because of lower interest rates and a significant change in the companys credit rating, it was decided to call the entire issue on June 30, 2020, and to issue new bonds. New 8% bonds were sold in the amount of $1 million at 104; they mature in 20 years. The company follows ASPE and uses straight-line amortization. The interest payment dates are December 31 and June 30 of each year.

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