Journal entry for a bond that is being retired early
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Information: On January 1,2010 IN Inc., issued $200,000 in bonds at face value. The bonds have a stated rate of 6%. The bonds mature in 10 years and pay interest once per year on Dec. 31.
Question: If the bonds were retired immediately after the first interest payment at a quoted price of 102, how would I prepare the journal entry to record the early retirement of the bonds?
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Solution Summary
This solution illustrates how to make a journal entry for a bond that is being retired early.
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Because the bonds were issued at face value, they are listed at $200,000 in the Bonds Payable account; there is no premium or discount on the books. Further, the interest ...
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