Answer:
Bonds Payable $91,200,000
Loss on early extinguishment $6,024,000
To Cash $93,024,000 ($91.2 million × 102%)
To Discount $4,200,000
(Being the redemption of the bond is recorded)
Explanation:
The journal entry is shown below:
Bonds Payable $91,200,000
Loss on early extinguishment $6,024,000
To Cash $93,024,000 ($91.2 million × 102%)
To Discount $4,200,000
(Being the redemption of the bond is recorded)
For recording this journal entry we debited the bond payable as it decrease the liability moreover the cash is also decreased so it is credited and the discount is also credited and the remaining balance is debited to the loss
