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Cerrena [4.2K]
3 years ago
14

Carr Corporation retires its $100,000 face value bonds at 105 on January 1, following the payment of interest. The carrying valu

e of the bonds at the redemption date is $103,745. The entry to record the redemption will include a Group of answer choices
Business
1 answer:
Brrunno [24]3 years ago
4 0

Answer: A. debit of $3,745 to Premium on Bonds Payable.

Explanation:

The carrying value of the bonds at redemption date is $103,745.

The bonds retired however, had a face value of $100,000.

The company therefore paid a premium on these bonds which is:

= 103,745 - 100,000

= $3,745

This amount will be debited to the Premium on Bonds Payable account.

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