1. Crane plc, redeemed £121,000 face value, 10% bonds on June 30, 2020, at 102. The carrying value of the bonds at the redemption date was £108,500. The bonds pay annual interest, and the interest payment due on June 30, 2020, has been made and recorded.
1. Crane plc, redeemed £121,000 face value, 10% bonds on June 30, 2020, at 102. The carrying value of the bonds at the redemption date was £108,500. The bonds pay annual interest, and the interest payment due on June 30, 2020, has been made and recorded.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following are two independent situations.
Crane plc. redeemed £121,000 face value, 10% bonds on June 30, 2020, at 102. The carrying value of the bonds at the
redemption date was £108,500. The bonds pay annual interest, and the interest payment due on June 30, 2020, has been
made and recorded.
1.
2.
For each independent situation above, prepare the appropriate journal entry for the redemption of the bonds. (Credit account titles
are automatically indented when amount is entered. Do not indent manually.)
Tastove Inc. redeemed £155,000 face value, 11% bonds on June 30, 2020, at 96. The carrying value of the bonds at the
redemption date was £157,650. The bonds pay annual interest, and the interest payment due on June 30, 2020, has been
made and recorded.
No. Account Titles and Explanation
Bonds Payable
1.
2.
Lovs on Bond Redemption
Cash
Bonds Payable
Loss on Bond Redemption
Debit
121000
14920
155000
2650
Credit
135920
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