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

question 11

Essay

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?

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Definitions:

PET Scan

Positron Emission Tomography, a medical imaging technique that produces detailed three-dimensional images of processes in the body.

Epinephrine

Also known as adrenaline, epinephrine is a hormone and neurotransmitter that plays a key role in the body’s fight-or-flight response.

Norepinephrine

A neurotransmitter and hormone important in the fight or flight response, involved in arousal and regulation of blood pressure.

Adrenal Gland

A gland above the kidney that produces hormones related to stress responses and blood pressure regulation.