Respuesta :
Answer:
A.Maria Corporation Journal entry
June30
Dr Bonds Payable 675,000
Dr Loss on Bond Redemption 66,600
Cr Cash 741,600
B.Spruce, Inc. Journal entry
June30
Dr Bonds Payable 350,000
Dr Gain on Bond Redemption 5,040
Cr Cash 344,960
Explanation:
A. Maria Corporation Journal entry
June 30, 2020
Dr Bonds Payable 675,000
Dr Loss on Bond Redemption 66,600
Cr Cash 741,600
($720,000 × 103% )
B.Spruce, Inc. Journal entry
June 30, 2020
Dr Bonds Payable 350,000
Dr Gain on Bond Redemption 5,040
Cr Cash 344,960
($352,000 × 98%)
Answer:
First bond:
dr notes payable $720,000
dr loss on bond redemption $66,600
cr discount on notes payable $45,000
cr cash $741,600
second bond:
dr notes payable $350,000
cr premium on bonds payable $2,000
cr cash $343,000
cr gain on bond redemption $5,000
Explanation:
The discount balance outstanding on the first bond is the face value of $720,000 minus the carrying value of $675,000,i.e $45,000($720,000-$675,000).
The amount of cash paid on redemption is $720,000*103%=$741,600
The outstanding premium on the second is $2,000($352,000-$350,000)
The amount of cash paid was $343,000( $350,000*98%)