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Prepare the journal entry to record the redemption of bonds

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Reference no: EM132743613

Question - Cullumber Company issued $620,000, 11%, 10-year bonds on December 31, 2019, for $550,000. Interest is payable annually on December 31. Cullumber Company uses the straight-line method to amortize bond premium or discount.

The journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation Debit Credit

Cash 550000

Discount on bonds Payable 70000

Bonds Payable 620000

The journal entry to record the payment of interest and the discount amortization on December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date Account Titles and Explanation Debit Credit

Interest Expense 75200

Discount on Bonds Payable 7000

Cash 68200

Required - Prepare the journal entry to record the redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded.

Reference no: EM132743613

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