Pizza Pier retires its 7% bonds for $68,000 before their
scheduled maturity. At the time, the bonds have a face value of
$70,000 and a carrying value of $74,937.
Record the early retirement of the bonds.
|
Face value of bonds = $70,000
Carrying value of bonds = $74,937
Unamortized bond premium = Carrying value of bonds- Face value of bonds
= 74,937-70,000
= $4,937
Cash paid to retire bonds = $68,000
Gain on retirement of bonds = Carrying value of bonds- Cash paid to retire bonds
= 74,937-68,000
= $6,937
Event | General Journal | Debit | Credit |
1 | Bonds payable | $70,000 | |
Premium on bonds payable | $4,937 | ||
Gain on bond retirement | $6,937 | ||
Cash | $68,000 | ||
( To record the retirement of the bonds) |
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