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katen-ka-za [31]
3 years ago
5

For each situation, prepare the appropriate journal entry for the redemption of the bonds.

Business
1 answer:
natali 33 [55]3 years ago
3 0

Answer and Explanation:

a) Discount:

Carrying Value:$106,554

Face Value:($118,000)

Discount:($11,446)

Calculate Gain/Loss:

Carrying Value:$106,554

Redemption Price:($120,360)

[118,000*102]

Loss:(13,806)

April 30 2022

Dr Bonds Payable $118,000

Dr Loss on Redemption $13,806

Cr Discount on Bonds Payable $11,446

Cr Cash $120,360

(Record retirement of bond at loss.)

(b)Calculate Premium:

Carrying Value:$271,021

Face Value:($250,400)

Premium:$20,621

Calculate Gain/Loss:

Carrying Value:$271,021

Redemption Price:($240,384)

[$250,400*96]

Gain$30,637

June 30, 2022

Dr Bonds Payable $250,400

Dr Premium on Bonds Payable $20,621

Cr Gain on Redemption $30,637

Cr Cash $240,384

(Record retirement of bond at gain.)

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