A company retired $68 million of its 5% bonds at 105 ($71.4 million) before their scheduled maturity. At the time, the bonds had a remaining discount of $1 million. Prepare the journal entry to record the redemption of the bonds.

A company retired $68 million of its 5% bonds at 105 ($71.4 million) before their scheduled maturity. At the time, the bonds had a remaining discount of $1 million. Prepare the journal entry to record the redemption of the bonds.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A company retired $68 million of its 5% bonds at 105 ($71.4 million) before their scheduled maturity. At the time, the bonds had a remaining discount of $1 million.

Prepare the journal entry to record the redemption of the bonds.

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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