columbus corporation purchased 150000 of its own bonds on june 30 at 101 and imm
ID: 2459461 • Letter: C
Question
columbus corporation purchased 150000 of its own bonds on june 30 at 101 and immediately retired them. The carrying value of the bonds on the retirement date was 137000. The bonds pay semiannual interest and the interest payment due on June 30 has been made and recorded. Prepare the journal entry to record the retirement of the bonds columbus corporation purchased 150000 of its own bonds on june 30 at 101 and immediately retired them. The carrying value of the bonds on the retirement date was 137000. The bonds pay semiannual interest and the interest payment due on June 30 has been made and recorded. Prepare the journal entry to record the retirement of the bondsExplanation / Answer
a)Retirement of bonds at maturity
June 30th
Bonds payable $ 137,000
loss on redemption of bonds $ 14500
To cash $ 151,500 (150000*1.01)
Note
Redemption value =150000*1.01
= $ 151500
Carrying value = $ 137,000
loss on redemption=$ 14500
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