Johnson Company has retained earnings balance of $550,000 at the end of 2016. During 2016 Johnson issued
$200,000 of 10 year, 10% bonds. As part of the bond issue the each year $20,000 of retained earnings will be unavailable to pay dividends.
Required:
Show the proper reporting requirements for Johnson's retained earnings restriction.

Question

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The Answer of Johnson Company has retained earnings balance of $550,000 at the end of 2016. During 2016 Johnson issued
$200,000 of 10 year, 10% bonds. As part of the bond issue the each year $20,000 of retained earnings will be unavailable to pay dividends.
Required:
Show the proper reporting requirements for Johnson's retained earnings restriction.

Johnson Company Has Retained Earnings Balance of $550,000 at the End