A company decides to redeem its bonds before maturity for 101. The face value of the bonds is $5,000,000 and the carrying amount on date of redemption is $4,945,000. The journal entry to record this transaction is:
A company decides to redeem its bonds before maturity for 101. The face value of the bonds is $5,000,000 and the carrying amount on date of redemption is $4,945,000. The journal entry to record this transaction is:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Step 1: Introduction:
Bonds payable is one of liability being incurred in business. On these bonds, regular interest payments needs to be made out and these can be issued at par value, premium or at discount.
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