Redemption of a Bond at Maturity

On March 31, 2014, Sammonds Inc. issued $250,000 face value bonds at a discount of $7,000. The bonds were retired at their maturity date, March 31, 2024.

Required:

Assuming that the last interest payment and the amortization of the discount have already been recorded, calculate the gain or loss on the redemption of the bonds on March 31, 2024. Identify and analyze the effect of the redemption of the bonds.

How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign.

Balance Sheet

Income Statement

Assets

=

Liabilities

+

Stockholders' Equity

Revenues

Expenses

=

Net Income

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