On January 2, 2012, Banno Corporation issued $1,500,000 of 10% bonds at 97 due December 31, 2021. Legal and other costs of $24,500 were incurred in connection with the issue. Interest on the bonds is payable annually each December 31. The $24,500 issue costs are being deferred and amortized on a straight-line basis over the 10-year term of the bonds. 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, 2017, Banno called $840,000 face amount of the bonds and redeemed them. (b) Ignoring income taxes, compute the amount of loss, if any, to be recognized by Banno as a result of retiring the $840,000 of bonds in 2017. (Round answer to 0 decimal places, e. g. 38,548.). Required: (a) Loss on redemption (b) Prepare the journal entry to record the redemption.
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On January 2, 2012, Banno Corporation issued $1,500,000 of 10% bonds at 97 due December 31, 2021. Le...
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