Sheridan Corporation redeemed $123,100 face value, 8% bonds on June 30, 2020, at 107

Exercise 15-08

The following are two independent situations.

1.		Sheridan Corporation redeemed $123,100 face value, 8% bonds on June 30, 2020, at 107. The carrying value of the bonds at the redemption date was $109,100. The bonds pay annual interest, and the interest payment due on June 30, 2020, has been made and recorded.
2.		Tastove Inc. redeemed $144,000 face value, 15.00% bonds on June 30, 2020, at 96. The carrying value of the bonds at the redemption date was $146,000. The bonds pay annual interest, and the interest payment due on June 30, 2020, has been made and recorded.

For each independent situation above, prepare the appropriate journal entry for the redemption of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.	Account Titles and Explanation	Debit	Credit
1.



2.

Solutions

Expert Solution

No	Date	Account Titles and Explanation	Debit	Credit
1	June 30	Bonds payable	123100
		Loss on redemption of bonds	22617
		Discount on bonds payable		14000	=123100-109100
		Cash		131717	=123100*1.07

2	June 30	Bonds payable	144000
		Premium on bonds payable	2000		=146000-144000
		Cash		138240	=144000*0.96
		Gain on redemption of bonds		7760

ekkarill92 answered 2 years ago

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