Bramble Corp retires its 720000 face value bonds at 106 on J

Bramble Corp. retires its $720000 face value bonds at 106 on January 1, following the payment of interest. The carrying value of the bonds at the redemption date is $746964. The entry to record the redemption will include a

a. debit of $43200 to Premium on bonds payable

b. credit of $26964 to loss on bond redemption

c. credit of $16236 to gain on bond redemption

d. debit of $26964 to premium on bonds payable

Solution

Journal entry The entry to record the redemption :

so answer is d. debit of $26964 to premium on bonds payable.