PE 14-6B Redemption of bonds payable

A $500,000 bond issue on which there is an unamortized premium of $67,000 is redeemed for $490,000. Journalize the redemption of the bonds.


Answer:

Bonds Payable 500,000
Premium on Bonds Payable 67,000
Gain on Redemption of Bonds 77,000
Cash 490,000