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the proceeds were used to redeem the 7%, 25-year mortgage bonds
on January 2, 2015. The indenture securing the new issue did not
provide for any sinking fund or for redemption before maturity.
(a) Prepare journal entries to record the issuance of (1) the 11%
bonds and (2) the redemption of the 7% bonds. (If no entry is
required, select "No Entry" for the account titles and enter 0 for the
amounts. Credit account titles are automatically indented when
amount is entered. Do not indent manually.)
8) Under IFRS, bond issuance costs, including the printing costs
and legal fees associated with the issuance, should be:
expensed in the period when the debt is issued.
recorded as a reduction in the carrying value of bonds
payable.
accumulated in a deferred charge account and amortized over
the life of the bonds.
reported as an expense in the period the bonds mature or are
retired.
9)
Which of the following is stated correctly?
Current liabilities follow non-current liabilities on the
statement of financial position under GAAP but non-current liabilities
follow current liabilities under IFRS.
IFRS does not treat debt modifications as extinguishments of
debt.
Under GAAP, bonds payable is recorded at the face amount
and any premium or discount is recorded in a separate account.
Under IFRS, bonds payable is recorded at the carrying value so no
separate premium or discount accounts are used.