Question
Several years ago, Cyclop Company issued bonds with a face value of $1,850,000 for $11,445,000. As a result of declining interest rates, the company has
Several years ago, Cyclop Company issued bonds with a face value of $1,850,000 for $11,445,000. As a result of declining interest rates, the company has decided to call the bonds at a call premium of 5 percent over par. The bonds have a current book value of $1,865,000.
Required:
Record the retirement of the bonds, using a premium account.
| No | Transaction | General Journal | Debit | Credit |
|---|---|---|---|---|
| 1 | 1 | Bonds payable | ||
| Loss on bond call | ||||
| Premium on bonds payable |
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Business Finance: Theory And Practice
Authors: Eddie McLaney
6th Edition
9780273673569
