Ask Question
20 November, 11:37

Bramble Corp. redeemed $118,000 face value, 9% bonds on April 30, 2022, at 102. The carrying value of the bonds at the redemption date was $106,554. The bonds pay annual interest, and the interest payment due on April 30, 2022, has been made and recorded.

Required:

Prepare the appropriate journal entry for the redemption of the bonds.

+3
Answers (1)
  1. 20 November, 12:54
    0
    The journal entry is shown below:

    Explanation:

    According to the scenario, the computation for the given data are as follows:

    Cash = face value * 102%

    = $118,000 * 102% = $120,360

    Loss on bond = $120,360 - $106,554 = $13,806

    Discount payable on bonds = $118,000 - $106,554 = $11,446

    Interest expense = $118,000 * 9% = $10,620

    So, the journal entry for the given data are as follows:

    Apr. 30 Bonds Payable A/c Dr $118,000

    Loss on bonds A/c Dr. $13,806

    To Cash A/c $120,360

    To Discounts payable A/c $11,446

    (Being redemption of bonds at 102 is recorded)

    Interest expense A/c Dr $10,620

    To bond interest A/c $10,620

    (Being bond interest is recorded)

    Bond Interest A/c Dr $10,620

    To cash A/c $10,620

    (Being bond interest payment is recorded)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Bramble Corp. redeemed $118,000 face value, 9% bonds on April 30, 2022, at 102. The carrying value of the bonds at the redemption date was ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers