On January 1, 2017, Teal Corporation redeemed $400,000 of bonds at 96. At the ti
ID: 2408168 • Letter: O
Question
On January 1, 2017, Teal Corporation redeemed $400,000 of bonds at 96. At the time of redemption, the unamortized premium was $12,000.
Prepare the corporation’s journal entry to record the reacquisition of the bonds. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548.)
Account Titles and Explanation
Debit
Credit
Account Titles and Explanation
Debit
Credit
Explanation / Answer
Answer
Date Account Name Debit Credit Jan 1, 2017 Bonds payable 400000 Premium on bonds 12000 Cash ( 400000 * 96 % ) 384000 Gain on redemption 28000