Vaughn Manufacturing retires its bonds at 105 on January 1, following the payment of annual interest. The face value of the bonds is $720000. The carrying value of the bonds at the redemption date is $745200. The entry to record the redemption will include a credit of $10800 to Gain on Bond Redemption. Odebit of $25200 to Premium on Bonds Payable. debit of $36000 to Premium on Bonds Payable. credit of $25200 to Loss on Bond Redemption.
Vaughn Manufacturing retires its bonds at 105 on January 1, following the payment of annual interest. The face value of the bonds is $720000. The carrying value of the bonds at the redemption date is $745200. The entry to record the redemption will include a credit of $10800 to Gain on Bond Redemption. Odebit of $25200 to Premium on Bonds Payable. debit of $36000 to Premium on Bonds Payable. credit of $25200 to Loss on Bond Redemption.
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 14MC: Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the...
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