In: Finance
On January 1,2021, Apple Company issued $840,000 of 8%,10-year bonds for 97. Apple retired all of these bonds on January 1,2022, at 102. If Apple uses the straight-line amortization, how much loss should be recognized on this bond retirement?
Loss on Issue of Bonds = Face Value * Discount %
= $ 840000 * 3%
= $ 25200
Loss on Retirement = Face Value * Premium
= $ 840000 * 2%
= $ 16800
Loss shall be amortized = $ 25200+ $ 16800
= $ 42000
Pls comment, if any further assistance is required.