A portion of the long-term liability footnote to the 2014 annual report of Tremor Corporation follows:

The debentures were issued on January 1 of a previous year and pay interest each December 31.The debentures retired were scheduled to mature December 31,2024.The retirement of the debentures occurred December 31,2014.Tremor paid the market value of the bonds which represented a yield rate of 8%.
Required:
1.Prepare the December 31,2014,interest payment entry
2.Prepare the December 31,2014,entry for bond retirement
3.What may have contributed to the recognition of a loss on the early retirement?

Question

A portion of the long-term liability footnote to the 2014 annual report of Tremor Corporation follows:
  
The debentures were issued on January 1 of a previous year and pay interest each December 31.The debentures retired were scheduled to mature December 31,2024.The retirement of the debentures occurred December 31,2014.Tremor paid the market value of the bonds which represented a yield rate of 8%.
Required:
1.Prepare the December 31,2014,interest payment entry
2.Prepare the December 31,2014,entry for bond retirement
3.What may have contributed to the recognition of a loss on the early retirement?

Quizplus · Accepted Answer

The Answer of A portion of the long-term liability footnote to the 2014 annual report of Tremor Corporation follows:
  
The debentures were issued on January 1 of a previous year and pay interest each December 31.The debentures retired were scheduled to mature December 31,2024.The retirement of the debentures occurred December 31,2014.Tremor paid the market value of the bonds which represented a yield rate of 8%.
Required:
1.Prepare the December 31,2014,interest payment entry
2.Prepare the December 31,2014,entry for bond retirement
3.What may have contributed to the recognition of a loss on the early retirement?

A Portion of the Long-Term Liability Footnote to the 2014