Kingbird Inc. had outstanding $12 million of 7.00% bonds (interest payable March 31 and September...
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Kingbird Inc. had outstanding $12 million of 7.00% bonds (interest payable March 31 and September 30) due in 12 years. Kingbird was able to reduce its risk rating through investing in more real estate. As a result, on September 1, it issued $7 million of 10-year, 5% ponds (interest payable July 1 and January 1) at 101. A portion of the proceeds was used to call the 7.00% bonds at 104 on October 1. The unamortized bond discount for the 7.00% bonds was $1.074 million on October 1. Kingbird prepares financial statements in accordance with IFRS. Prepare the necessary journal entries to record the issue of the new bonds and the retirement of the old bonds. (Credit account titles are automatically 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.) Account Titles and Explanation Debit Credit Cash 7000000 Bonds Payable 7000000 (To record issuance of 5% bonds) Bonds Payable 12000000 Loss on Redemption of Bonds Cash (To record retirement of 7.00% bonds)
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