On January 1,2019,Zend Corporation issued $500,000,8% bonds,receiving a $20,000 premium.On the interest date 5 years later,after the bond interest was paid and after 40% of the premium had been amortized,the corporation purchased the entire issue on the open market at 98 and retired the issue.Prepare the journal entry to record the retirement.
$\begin{array}{|l|l|r|r|}
\hline \text { Jan-01 } & \text { Bonds Payable } &500,000 & \
\hline & \text { Premium on Bonds Payable* } &12,000 & \
\hline & \text { Cash** } & &490,000\
\hline & \text { Gain on Retirement of Bonds } & & 22,000 \
\hline
\end{array}$

Question

On January 1,2019,Zend Corporation issued $500,000,8% bonds,receiving a $20,000 premium.On the interest date 5 years later,after the bond interest was paid and after 40% of the premium had been amortized,the corporation purchased the entire issue on the open market at 98 and retired the issue.Prepare the journal entry to record the retirement.
 $\begin{array}{|l|l|r|r|}
\hline \text { Jan-01 } & \text { Bonds Payable } &500,000 & \
\hline & \text { Premium on Bonds Payable* } &12,000  &  \
\hline & \text { Cash** } & &490,000\
\hline & \text { Gain on Retirement of Bonds } & & 22,000  \
\hline
\end{array}$

Quizplus · Accepted Answer

The Answer of On January 1,2019,Zend Corporation issued $500,000,8% bonds,receiving a $20,000 premium.On the interest date 5 years later,after the bond interest was paid and after 40% of the premium had been amortized,the corporation purchased the entire issue on the open market at 98 and retired the issue.Prepare the journal entry to record the retirement.
 $\begin{array}{|l|l|r|r|}
\hline \text { Jan-01 } & \text { Bonds Payable } &500,000 & \
\hline & \text { Premium on Bonds Payable* } &12,000  &  \
\hline & \text { Cash** } & &490,000\
\hline & \text { Gain on Retirement of Bonds } & & 22,000  \
\hline
\end{array}$

On January 1,2019,Zend Corporation Issued $500,000,8% Bonds,receiving a $20,000 Premium