The company has bonds payable with a total face value of $100,000 and a carrying value of

Question:

The company has bonds payable with a total of $100,000 and a carrying value of $103,000. In addition, unpaid interest on the bonds has been accrued in the amount of $6,000. The lender has agreed to the settlement of the bonds in exchange for land worth $90,000. The land has a historical cost of $64,000. Make the journal entry necessary on the books of the borrower to record this settlement of the bonds payable.

Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...