The situations presented here are independent of each other. For each situation,

Question

The situations presented here are independent of each other. For each situation, prepare the appropriate journal entry for the redcmpt.on of the bonds.(a) Hearth Corporation retired $196.400 face value. 9% bonds on April 30. 2012, at 103. The carrying value of the bonds at the redemption date was $177.461 The bonds pay annual interest, and the interest payment due on April 30, 2012, has been made and recorded (Credit account titles are automatically indented when amount is entered. Do not Indent manually.)

Explanation / Answer

April 30

Bonds payable account debit $177,461

Loss on retirement of bonds $18,939

To cash $196,400

( For bonds at carrying value of 177,461 retired for 186,400)

Jun 30

Bonds payable account debit $239,849

To gain on retirement of bonds $18,249

To cash $ 221,600

( For bonds at carrying value of 239,849 retired for 221,600)

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