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9 February, 00:30

On January 1, 2020, Windsor Corporation redeemed $420,000 of bonds at 98. At the time of redemption, the unamortized premium was $12,600. Prepare the corporation's journal entry to record the reacquisition of the bonds.

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  1. 9 February, 03:18
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    The Journal entry is as follows:

    On January 1, 2020

    Bonds Payable A/c Dr. $420,000

    Premium on Bonds Payable A/c Dr. $12,600

    To Gain on Redemption of Bonds $21,000

    To cash $411,600

    (To record the re-acquisition of the bonds)

    Working Notes:

    Cash = $420,000 * 0.98

    = $411,600
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