Question

Exercise 10-18 The situations presented here are independent of each other. For each situation, prepare the appropriate journal entry for the redemption of the bonds. Blue Spruce Corp. redeemed $160,000 face value, 10% bonds on April 30, 2022, at 105. The carrying value of the bonds at the redemption date was $144,480. The bonds pay annual interest, and the interest payment due on April 30, 2022, has been made and recorded. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Apr. 30 enter an account title for the journal entry on April 30 enter a debit amount enter a credit amount enter an account title for the journal entry on April 30 enter a debit amount enter a credit amount enter an account title for the journal entry on April 30 enter a debit amount enter a credit amount enter an account title for the journal entry on April 30 enter a debit amount enter a credit amount SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO VIDEO Larkspur, Inc. redeemed $180,000 face value, 13.0% bonds on June 30, 2022, at 98. The carrying value of the bonds at the redemption date was $194,400. The bonds pay annual interest, and the interest payment due on June 30, 2022, has been made and recorded. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jun. 30 enter an account title for the journal entry on June 30 enter a debit amount enter a credit amount enter an account title for the journal entry on June 30 enter a debit amount enter a credit amount enter an account title for the journal entry on June 30 enter a debit amount enter a credit amount enter an account title for the journal entry on June 30 enter a debit amount enter a credit amount

Answer 1

Answer

--The two journal entries asked for two different situations are

Date	Accounts title	Debit	Credit
30-Apr-22	Bonds Payable	$160,000
	Loss on redemption	$23,520
	Discount on Bonds Payable ($160000 - 144480)		$15,520
	Cash ($160000 x 105/100)		$168,000
	(to record redemption)
Date	Accounts title	Debit	Credit
30-Jun-22	Bonds Payable	$180,000
	Premium on Bonds Payable ($194400 - 180000)	$14,400
	Gain on redemption		$18,000
	Cash ($180000 x 98/100)		$176,400
	(to record redemption)