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20 June, 04:47

Magic Mountain retires its 8% bonds for $124,000 before their scheduled maturity. At the time, the bonds have a face value of 122,000 and a carrying value of $114,000. Record the early retirement of the bonds. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

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  1. 20 June, 07:59
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    Journal entry

    Explanation:

    The recording of the early retirement of the bonds is shown below:

    Bond payable $122,000

    Loss on the redemption of bonds $10,000

    To Bond discount amortization $8,000 ($122,000 - $144,000)

    To Cash $124,000

    (Being recording of early retirement of the bonds is made)

    The balancing figure is to be debited to Loss on the redemption of bonds
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