Homework Answers
Solution:
| Date | General Journal | Debit | Credit |
| July. 01 | Bonds Payable | $ 300,000 | |
| Premium on Bonds Payable [300000-308600] | $ 8,600 | ||
| Gain on Retirement of Bonds [308600-306000] | $ 2,600 | ||
| Cash | $ 306,000 | ||
| ( To record retirement of bond) |
Notes:
1) Premium on Bonds Payable = Carrying Value - Par Value = 308600-300000 = $ 8,600.
2) Gain on Retirement of Bonds =Carrying Value- Cash Paid at retirement = 308600-306000= $ 2,600.
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