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Re: Additional InformationRe: Need help,about a Accounting problem about Partial
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Re: Additional InformationRe: Need help,about a Accounting problem about Partial# Business - 商学院
h*u
1
ok, now i get it,
the first .5 is related to the 50% bonds being retired, the second .5 is
related to the half year thing (like i mentioned before, the bond was issued
on 01/01 and retired at 06/30 5years later. )
that's why he multiplied everything by 25%.
although the interest is paid annually, now you are retiring 50% of the bond,
so the interest related to 50% of the bond in this half year has to be
recognized.
one thing troubles me though, it seems very weird to me that you'd dr.
discount w
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h*u
2
actually, if the bond is retired on 01/01, there shouldn't be any interest expense.
cuz appropriate journal entry should have been made on 12/31 previous year.
(that is, if the bond has been issued on 01/01 and all the interest payments
are made on 12/31.)
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h*u
3
let me make this straight, if the bond is retired on 01/01, rather than 06/30,
the journal entry should be:
dr. b/p 2500000
dr.loss 244483
cr. discount 44483 ( (5000000-4911034)/2)
cr. cash 2700000
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