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Journal entry Particulars Debit Credit Bonds payable (face value amount) 91,900,000 Loss on early extinguishment (balance figure) 6,738,000 Discount on bonds 4,900,000 Cash ($91,900,000 × 102%) redemption 93,738,000 Particulars Debit Credit Bonds payable (face value amount) 91,900,000 Loss on early extinguishment (balance figure) 6,738,000 Discount on bonds 4,900,000 Cash ($91,900,000 × 102%) redemption 93,738,000

ID: 2608748 • Letter: 1

Question

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The balance sheet of Indian River Electronics Corporation as of December 31, 2017, included 12.75% bonds having a face amount of $91.9 million. The bonds had been issued in 2010 and had a remaining discount of $4.9 million at December 31, 2017. On January 1, 2018, Indian River Electronics called the bonds before their scheduled maturity at the call price of 102.

Required:
Prepare the journal entry by Indian River Electronics to record the redemption of the bonds at January 1, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

Explanation / Answer

Journal entry

Particulars

Debit

Credit

Bonds payable (face value amount)

91,900,000

Loss on early extinguishment (balance figure)

6,738,000

Discount on bonds

4,900,000

Cash ($91,900,000 × 102%) redemption

93,738,000