The situations presented here are independent of each other.
For each situation, prepare the appropriate journal entry for the redemption of the bonds.
a) Pelfer Corporation redeemed $140,000 face value, 9% bonds on April 30, 2014, at 101. The carrying value of the bonds at the redemption date was $126,500. The bonds pay annual interest, and the interest payment due on April 30, 2014, has been made and recorded.
b) Youngman, Inc., redeemed $170,000 face value, 12.5% bonds on June 30, 2014, at 98. The carrying value of the bonds at the redemption date was $184,000. The bonds pay annual interest, and the interest payment due on June 30, 2014, has been made and recorded.
a. 30 April Bonds Payable dr. 1,40,000 Loss on Bond Redemption dr.($1,41,400 - $1,26,500) = 14,900 To Discount on Bonds... View the full answer
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