29. Help me selecting the right answer. Thank you **Smith Company Bond Retirement Journal Entry**Smith Company has issued a $100,000 face value, 7%, five-year bond at 91. What will be the journal entry for the retirement of the bond, assuming the last semiannual interest payment was already recorded?1. **Option A:** - Bonds Payable: $100,000 - Cash: $100,0002. **Option B:** - Cash: $100,000 - Bonds Payable: $100,0003. **Option C:** - Bonds Payable: $91,000 - Cash: $91,000 4. **Option D:** - Cash: $91,000 - Bonds Payable: $91,000**Explanation:** The options above are potential journal entries to record the retirement of the bond. The entry should reflect the bond's face value, interest rate, and the issue price being at 91. Selecting the correct journal entry is crucial for accurate financial reporting.

Answer to the Question:- Bonds Payable 100,000 Cash 100,000 ......................................................................................................................................................................................................... In the given case, 7% , 5 year bond have been issued at 91, face value being 100. So face value of 100,000 bonds have been issued at 91,000(i.e 100,000/100*91] When bonds are issued at discount are retired at their face value . In the given scenario, the Company is required to pay 100,000 to retire the bonds , however while raising the bond, it got 91,000. So bond was issued at total discount of 9,000(100,000-91,000). When bonds were issued at discount following journal entry was passed:- Cash/Bank A/c xxx Discount on Bond Payable xxx Bonds payable xxxWhen bonds are retired, the following entries are passed to reverse the original entry at the time of issuance of bond: Bonds Payble To, Cash/Bank [Discount on issue of bond is ammortised during life of bond]