Prepare journal entries for redemption of bonds.
The situations presented here are independent of each other.
Instructions
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.
