On January 1,2013,Jacob Issues $800,000 of 9%,13-Year Bonds at a Price

question 164

Multiple Choice

On January 1,2013,Jacob issues $800,000 of 9%,13-year bonds at a price of 96½.Six years later,on January 1,2019,Jacob retires 20% of these bonds by buying them on the open market at 105½.All semiannual interest is accounted for and paid through December 31,2018,the day before the purchase.The straight-line method is used to amortize any bond discount or premium.What is the journal entry to record the retirement of 20% of the bonds on January 1,2019?

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Definitions:

Rental Rate

The price paid for the temporary use of a good, service, or property expressed typically as a daily, monthly, or yearly rate.

Minimum Cost

The lowest possible expense incurred in the production of a good or the provision of a service.

Output Levels

The quantity of goods or services produced by a firm, industry, or economy in a given period.

Competitive Market

An economic system where multiple firms sell similar products or services, encouraging fairness and efficiency, driven by supply and demand mechanisms.