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For each situation prepare the appropriate journal entry for the redemption of the bonds.

(a) Thunder Corporation retired $130,000 face value, 12% bonds on June 30, 2007, at 102. The carrying value of the bonds at the redemption date was $122,500. The bonds pay annual interest, and the interest payment due on June 30, 2007, has been made and recorded.

(b) Lightning, Inc., retired $180,000 face value, 12.5% bonds on June 30, 2007, at 98. The carrying value of the bonds at the redemption date was $184,000. The bonds pay annual interest, and the interest payment due on June 30, 2007, has been made and recorded.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9974123

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