Raysport Inc

question 27

Essay

Raysport Inc.sells $1,000,000 of three-year bonds on January 1,2017,for $980,000.The coupon rate on the bonds is 6% payable on July 1 and January 1.Transaction costs directly attributable to issuing the bonds total $20,000.Raysport Inc's fiscal year-end is December 31.The effective semi-annual rate is 3.6510%.On October 1,2018,Raysport Inc.repurchases the bonds on the open market for total consideration of $980,000 cash.Raysport uses the effective interest method.
Required: Record the journal entries for derecognition at October 1,2018.

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Definitions:

Interpretive Comments

Observations or explanations that are based on personal judgment or analysis, often offering insight into meaning or context.

Clarify

To make something less confused and more clearly comprehensible.

Rule Of Thumb

A widely accepted guideline or method based on practical experience rather than theory.

Objective Analysis

The examination and evaluation of facts or evidence in a manner free from personal feelings, interpretations, or prejudice, focused on observable phenomena.