Homework Answers
Issue price of 960000 = 960000*.99 = 950400
Discount on bonds payable = 9600
Annual amortization = 9600/10 = 960
Carrying value on redemption = 950400+(960*5) = 955200
Loss on redemption = (960000*1.02)-955200 = 24000
b) Journal entry
| Date | account and explanation | Debit | Credit |
| Bonds payable | 960000 | ||
| Loss on redemption | 24000 | ||
| Discount on bonds payable | 4800 | ||
| Cash | 979200 |
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