Philosophy Insights Corporation retires its $500,000 face-value bonds at 102 on January 1, after interest is...
Philosophy Insights Corporation retires its $500,000 face-value bonds at 102 on January 1, after interest is paid. The bonds’ carrying value at the date of retirement is $481,250. What should the entry to record the redemption include?
| $10,000 debit to premium on bonds payable |
| $18,750 credit to discount on bonds payable |
| $18,750 credit to loss on bond redemption |
| $28,750 debit to gain on bond redemption |
Homework Answers
b. $18,750 credit to discount on bonds payable.
Discount on bonds payable = $500,000 – $481,250 = $18,750
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