Sergei Company issued $400,000 of bonds on January 1, 2017 Prepare the journal e

Question

Sergei Company issued $400,000 of bonds on January 1, 2017 Prepare the journal entry to record the redemption of the bonds at maturity, assuming the bonds were issued at 100. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Prepare the journal entry to record the redemption of the bonds before maturity at 97, Assume the balance in Premium on Bonds Payable is $4,000. (Credit account titles are automatically indented when the amount is entered. Do not indent manually) Account Titles and Explanation Debit Credit

Explanation / Answer

1 Account Titles and Explaination Debit Credit Bonds Payable $       4,00,000 Cash $       4,00,000 2 Account Titles and Explaination Debit Credit Bonds Payable $       4,00,000 Premium on bonds payable $           40,000 Cash (4,000 bonds X $97) $       3,88,000 Gain on Bond Redemption $           52,000 3 Account Titles and Explaination Debit Credit Bonds Payable $       4,00,000 Common Stock (15,000 shares X $10) $       1,50,000 Paid-in capital in excess of par $       2,50,000

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