Question

The balance sheet for Monty Consulting reports the following information on July 1, 2022. Long-term liabilities Bonds payable $1,380,000 Less: Discount on bonds payable 55,200 $1,324,800 Monty decides to redeem these bonds at 102 after paying annual interest. Prepare the journal entry to record the redemption on July 1, 2022.

Answer 1

Date Accounts & Explanation Debit Credit

July 1, Bonds payable $1,380,000

2022 Loss on bonds redemption $82,800

Discount on bonds payable $55,200

Cash A/C $1,407,600

[$1,380,000*102%]

(To record the redemption of bond)