Presented Below Are Two Independent Situations

question 8

Essay

Presented below are two independent situations:
a) On December 31, 2021, Legault Corporation had $ 1,000,000, 8% bonds payable issued. The bonds pay interest on January 1 and June 1 of each year, and mature on January 1, 2021. On January 2, 2022, Legault redeemed 60% of these bonds at 101. The amortized cost of the entire bond issue on the retirement date was $ 1,026,000. The interest payment due on January 1, 2022, has been made and recorded.
b) Antonio Inc. redeemed $ 500,000 of its bonds at 98 on December 31, 2021. The amortized cost of the bonds on the retirement date was $ 497,500. The bonds pay semi-annual interest and the interest payment due on December 31, 2021, has been made and recorded.
Instructions
For each of the independent situations, prepare the journal entry to record the retirement of the bonds.

Understand how exchange rate changes affect the price of imported goods and services.

Learn the principles of the gold standard and its implications for currency valuation.

Grasp the relationship between the price of currencies and their value in foreign exchange.

Comprehend the concepts of current account deficits and surpluses and their impact on national economies.

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Definitions:

After-tax Holding-period Return

The return on an investment after accounting for taxes, over the period it was held, reflecting the true gain or loss.

Personal Trusts

Financial instruments in which assets are held by a trustee for the benefit of the trust's beneficiaries according to the terms of the trust agreement.

Risk Averse

A description of an investor's or institution's preference to avoid risk, opting instead for the most stable and predictable outcomes.

Investment Horizon

The total length of time that an investor expects to hold a portfolio or a specific investment before selling it.