Redemption of Bonds Issued at a Premium Brighton Unlimited sold bonds at a premi

Question

Redemption of Bonds Issued at a Premium Brighton Unlimited sold bonds at a premium for $745,500 (premium of $35,500) eight years ago. a. The corporation redeems $71,000 of this issue at 98. The unamortized premium is $710 b. The corporation redeems $106,500 of this issue at 102. The unamortized premium is $1,065. Prepare journal entries to record the redemption in (a) and (b). If an amount box does not require an entry, leave it blank. Page: 1 DOC. POST. DEBIT CREDIT DATE ACCOUNT TITLE . REF a. 6 b. Ne

Explanation / Answer

Solution :

Journal Entries - Brighton Unlimited Event Particulars Debit Credit a Bond Payable Dr $71,000.00 Premium on bond payable Dr $710.00                To Cash $69,580.00                To Gain on redemption of bond $2,130.00 (To redemption of bonds recorded) b Bond Payable Dr $106,500.00 Premium on bond payable Dr $1,065.00 Loss on redemption of bond Dr $1,065.00                To Cash $108,630.00 (To redemption of bonds recorded)

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