R & B Inc. issued $500,000, 10-year bonds at a premium. Prior to maturity, when the carrying value of the bonds is $508,000, the company retires the bonds at 102. Prepare the entry to record the redemption of the bonds

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1.50K viewsJanuary 21, 2017

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Darshita 6.14K January 21, 2017 0 Comments

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score 0 · Answer 1 · 2017-01-21T03:58:00+00:00

There is a loss on redemption: The cash paid, $510,000 ($500,000 3 102%), is

greater than the carrying value of $508,000. The entry is:

Bonds Payable 500,000

Premium on Bonds Payable 8000

Loss on Bond Redemption 2000

Cash 510,000

(To record redemption of bonds at 102)

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