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Unformatted text preview: included 10% bonds with a face amount of $40 million and a remaining unamortized premium of $6 million. On January 1, 2006, Eastern Post retired some of the bonds before their scheduled maturity. Prepare the journal entry by Eastern Post to record the early retirement of the bonds under each of the independent circumstances. 1. Eastern Post called half the bonds at the call price of 102 (102% of face amount.) 2. Eastern Post repurchased $10 million of the bonds on the open market at their market price of $10.5 million. Solution #1 Bonds Payable 20M Premium on Bonds 3M Cash 20.4M Gain 2.6M Solution #2 Bonds Payable 10.0M Premium on Bonds 1.5M Cash 10.5M Gain 1.0M...
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