Nair Company issued a $7 million bond at a discount five years ago. The current carrying amount of the bond is $6.25 million. The company now has excess cash and decides to retire the bond. The bond is callable at 120 percent of its face value. Required: Prepare the journal entry to record the retirement of the bond. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in dollars not in millions.) Answer is not complete. No 1 Transaction (a) Bond payable General Journal Debit Credit 7,000,000 × Discount on bonds payable 750,000 x Cash 6,250,000
Nair Company issued a $7 million bond at a discount five years ago. The current carrying amount of the bond is $6.25 million. The company now has excess cash and decides to retire the bond. The bond is callable at 120 percent of its face value. Required: Prepare the journal entry to record the retirement of the bond. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in dollars not in millions.) Answer is not complete. No 1 Transaction (a) Bond payable General Journal Debit Credit 7,000,000 × Discount on bonds payable 750,000 x Cash 6,250,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Nair Company issued a $7 million bond at a discount five years ago. The current carrying amount of the bond is $6.25 million. The
company now has excess cash and decides to retire the bond. The bond is callable at 120 percent of its face value.
Required:
Prepare the journal entry to record the retirement of the bond. (If no entry is required for a transaction/event, select "No journal
entry required" in the first account field. Enter your answers in dollars not in millions.)
1
No
Answer is not complete.
Transaction
(a)
Bond payable
General Journal
Debit
Credit
7,000,000 x
Discount on bonds payable
☑
Cash
750,000 x
6,250,000 x
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