Question

On December 31, a $1,500,000 bond issue on which there is an unamortized discount of $70,100 is redeemed for $1,455,000.

Journalize the redemption of the bonds. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTS
General Ledger
ASSETS
110 Cash
111 Petty Cash
121 Accounts Receivable
122 Allowance for Doubtful Accounts
126 Interest Receivable
127 Notes Receivable
131 Merchandise Inventory
141 Office Supplies
191 Land
194 Office Equipment
195 Accumulated Depreciation-Office Equipment
LIABILITIES
210 Accounts Payable
221 Salaries Payable
231 Sales Tax Payable
232 Interest Payable
241 Notes Payable
251 Bonds Payable
252 Discount on Bonds Payable
253 Premium on Bonds Payable
EQUITY
311 Common Stock
312 Paid-In Capital in Excess of Par-Common Stock
315 Treasury Stock
321 Preferred Stock
322 Paid-In Capital in Excess of Par-Preferred Stock
331 Paid-In Capital from Sale of Treasury Stock
340 Retained Earnings
351 Cash Dividends
352 Stock Dividends
390 Income Summary
REVENUE
410 Sales
610 Interest Revenue
611 Gain on Redemption of Bonds

Answer 1

Journal entry

Date Accounts & Explanation Debit Credit

Dec 31 Bonds payable $1,500,000

Loss on Redemption of Bonds $25,100

Unamortized Discount on bonds payable $70,100

Cash $1,455,000

(To record redemption of bonds payable)