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likoan [24]
3 years ago
5

A $375,000 bond issue on which there is an unamortized discount of $40,000 is redeemed for $320,000. Journalize the redemption o

f the bonds.
Business
1 answer:
Fudgin [204]3 years ago
7 0

Answer:

The Journal entry is as follows:

Bonds payable A/c Dr. $375,000

   To Discount on Bonds payable            $40,000

   To Gain on redemption of the bonds   $15,000

   To Cash                                                   $320,000

(To record the redemption of the bonds)

Workings:

Gain on redemption of the bonds:

= Bonds payable - Discount on Bonds payable - Cash

= $375,000 - $40,000 - $320,000

= $15,000

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