The balance sheet for Miley C Longterm liabilitiers 18000043

The balance sheet for Miley C Long-term liabilitiers 180,000$4,320,000 Miley decides to redeem these bonds at 104 after paying annual interest. Prepare the journal entry to record the redemption on July 1, 2017. (Credit account titles are Credit July 1 accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor

Solution

Loss on redemption is = ( Redemption value - Book value ) = (4500000*104%)-4320000 =4680000-4320000 = $ 360,000/-

Cash is @= $ 4,680,000/-

Journal entry will be :-

Bonds Payable Dr 4,500,000

Loss on redemption of bonds Dr 360,000

To Cash. 4,680,000

To Discount on bonds payable 180,000