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Show Attempt History Current Attempt in Progress On January 2, 2018, Blossom Corporation, a small company that follows ASPE, issued $1.2 million of 7% bonds at 96 due on December 31, 2027. Legal and other costs of $120,000 were incurred in connection with the issue. Blossom has a policy of capitalizing and amortizing the legal and other costs incurred by including them with the bond recorded at the date of issuance. Interest on the bonds is payable each December 31. The $120,000 of issuance 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. (The straight-line method is not materially different in its effect compared with the effective interest method.) The bonds are callable at 102 (that is, at 102% of their face amount), and on January 2, 2023, the company called a face amount of $700,000 of the bonds and retired them. (a)

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On January 2, 2018, Blossom Corporation, a small company that follows ASPE, issued $1.2 million of 7% bonds at 96 due on December 31, 2027. Legal and other costs of $120,000 were incurred in connection with the issue. Blossom has a policy of capitalizing and amortizing the legal and other costs incurred by including them with the bond recorded at the date of issuance. Interest on the bonds is payable each December 31 . The $120,000 of issuance 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. (The straight-line method is not materially different in its effect compared with the effective interest method.) The bonds are callable at 102 (that is, at 102% of their tace amount), and on January 2, 2023, the company called a face amount of $700,000 of the bonds and retired them. On January 2,2018, Blossom Corporation, a small company that follows ASPE, issued $1.2 million of 7% bonds at 96 due on December 31, 2027. Legal and other costs of $120,000 were incurred in connection with the issue. Blossom has a policy of capitalizing and amortizing the legal and other costs incurred by including them with the bond recorded at the date of issuance. Interest on the bonds is payable each December 31. The $120,000 of issuance 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. (The straight-line method is not materially different in its effect compared with the effective interest method.) The bonds are callable at 102 (that is, at 102% of their face amount), and on January 2,2023 , the company called a face amount of $700,000 of the bonds and retired them. Ignoring income taxes, calculate the amount of loss, if any, that the company needs to recognize as a result of retiring $700,000 of bonds in 2023. Prepare the journal entry to record the retirement. (Round answer to 0 decimol places, eg. 5,275, Credit account titles are automotically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries) How would the amount of the loss calculated in part (a) differ if Blossom's policy had been to carry the bonds at fair value and thus expense the costs of issuing the bonds at January 2, 2018? Assuming that Blossom had followed this policy, prepare the journal entry to record the retirement. Assume the redemption price approximates fair value. (Credit account titles are outomatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titjes and enter O for the amounts. List debit entry before credit entry)

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