If bonds with a face value of $20,000 are redeemed before maturity when the amortized cost of the bonds is $18,000, the entry to record the redemption will include a debit to
A) Bonds Payable for $20,000.
B) Bonds Payable for $18,000.
C) Interest Payable for $2,000.
D) Bonds Payable equal to the market price of the bonds on the date of conversion.

Question

Quizplus · Accepted Answer

The entry to record the redemption of bonds before maturity includes a debit to Bonds Payable for the face value of the bonds, which is $20,000 in this case, regardless of the amortized cost or market price at the time of redemption.

If Bonds with a Face Value of $20,000 Are Redeemed