Do It Review 103b Marigold Corp issued 464000 of 11year bond

Do It! Review 10-3b Marigold Corp. issued $464,000 of 11-year bonds at a discount. Prior to maturity, when the carrying value of the bonds was $450,080, the company redeemed the bonds at 99 Prepare the entry to record the redemption of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit SHOW LIST OF ACCOUNTS

Solution

Journal Entry to Retire Bond

Accounts and Explanations

Debit

Credit

Bonds Payable

$ 450,080.00

Loss on Retirement of Debt *

$      9,280.00

               Cash**

$ 459,360.00

(Retirement of bond at loss)

*Loss on Retirement of Debt is Cash paid minus Book value of Bond.

**Redemption value of bond is $ 464000/100*99

Journal Entry to Retire Bond
Accounts and Explanations	Debit	Credit
Bonds Payable	$ 450,080.00
Loss on Retirement of Debt *	$      9,280.00
Cash**		$ 459,360.00
(Retirement of bond at loss)