A $500,000 bond was redeemed at 98 when the carrying amount of the bond was $500,000 a. When the bond was issued, was it issued at a premium or a discount? (circle one) b. How do you know this? The carrying value of bond is more than the face value, which implies that the bond was issued at a premium. Bond Carrying Value = Face Value + Bond Premium If so, how much was the balance of the premium or discount at the time of redemption? Balance of Premium = Bond carrying value-Bond Face Value =$503,000-$500,000 - 53000 d. When the bond is redeemed, how much cash did they have to pay the bondholders? (show your calculation) Cash Payable on Redemption = No. of bonds redeemed - Redemption price per bond [Total Bond face value/face value per sharel Redemption price per bond =[S500,000/1001-98 = $490,000 e. What is the gain or loss on the redemption of the bonds? f. What is the general journal entry for the bond redemption? Date Account/description Debit Credit