Question
On July 1, 2015, Quonk Inc. issued $1000 in principal of five-year zero coupon bonds. The company received proceeds of $650. On July 1, 2019,
On July 1, 2015, Quonk Inc. issued $1000 in principal of five-year zero coupon bonds. The company received proceeds of $650. On July 1, 2019, the carrying value of the debt was $917. On that day, the company repurchased and retired the debt for $950.
Record the journal entry for the early retirement of the debt.
On July 1, 2015, Quonk Inc. issued $1000 in principal of five-year zero coupon bonds. The company received proceeds of $650. On July 1, 2019, the carrying value of the debt was $917. On that day, the company repurchased and retired the debt for $950.
Record the journal entry for the early retirement of the debt.
Dr. Loss on earlyretirementof debt -- $50
Dr. Loss on earlyretirementof debt -- $33
Cr. Debt payable -- $917
Dr. Debt payable -- $1000
Cr. Discount on debt payable -- $83
Cr. Gain on earlyretirementof debt -- $50
Dr. Cash -- $917
Cr. Cash -- $950
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Financial Accounting
Authors: W. Steve Albrecht, James D. Stice, Earl K. Stice
10th edition
324645570, 978-0324645576
