The company has outstanding bonds payable with a total face value of $100,000. On July 1, the

Question:

The company has outstanding bonds payable with a total of $100,000. On July 1, the company redeemed the bonds by purchasing them on the open market for a total of $102,700. Make the necessary journal entry on the issuer’s books to record the redemption of the bonds assuming that
(1) The bonds have an unamortized discount of $2,000 and
(2) The bonds have an unamortized premium of $2,000.

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...