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?

---

Definitions:

Organization Interest Principle

A guideline suggesting that the interests of the organization should take precedence over individual interests when making decisions.

Good for Organization

Actions, policies, or strategies that are beneficial for the overall health, performance, and success of an organization.

Self-Serving Decisions

Actions and judgments made by individuals that benefit themselves, often at the expense of others or ethical principles.

Organization Interest

Refers to the priorities, goals, or concerns that an organization focuses on or advocates for.