ssignment Help Save & Exit Submit Check my work Required information [The follow

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ssignment Help Save & Exit Submit Check my work Required information [The following information applies to the questions displayed below] On January 1, 2017, Shay issues $320,000 of 9%, 20-year bonds at a price of 9675 Six years later, on January 1, 2023 Shay retres 25% of these bonds by buying them on the open market at 10475, All interest is accounted for and paid through December 31, 2022, the day before the purchase. The straight-line method is used to amortize any bond discount 4. what is the carrying (book) value of the bonds and the carrying value of the 25% soon-to-be-retired bonds as of the clo business on December 31, 2022? se of Retired 25% Entire Par value Remaining discount Carrying value

Explanation / Answer

Maturity value of bonds 320000 Issue price of bonds (3200*96.75) 309600 Total discount on bonds for 20 years 10400 Annual amortization f discount (10400/20) 520 Discount amortized for 6 years (520*6) 3120 Unamortized Discount at the end of 6 years 7280 Unamortized discount for25% of bonds 1820 (7280*25%) Entire Retired Group 25% Par value 320000 80000 Remaining discount 7280 1820 Carrying value 312720 78180

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