Two independent situations follow: 1. Longbine Corporation redeemed $130,000 face value, 12% bonds on June 30, 2021,

Question:

Two independent situations follow:

1. Longbine Corporation redeemed $130,000 face value, 12% bonds on June 30, 2021, at 102. The bonds’ amortized cost at the redemption date was $117,500. The bonds pay annual interest, and the interest payment due on June 30, 2021, has been made and recorded.

2. Tastove Inc. redeemed $150,000 face value, 12.5% bonds on June 30, 2021, at 98. The bonds’ amortized cost at the redemption date was $151,000. The bonds pay annual interest, and the interest payment due on June 30, 2021, has been made and recorded.


Instructions

For each situation above, prepare the appropriate journal entry for the redemption of the bonds.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Accounting Principles Volume 2

ISBN: 978-1119502555

8th Canadian Edition

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak

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