Kant Corporation retires its $300,000 face value bonds at 102 on January 1, following the payment of interest. The carrying value of the bonds at the redemption date is $288,750. The entry to record the redemption will include a

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The carrying value of the bonds at redemption is $288,750 ($300,000 face value - $11,250 discount). Since the bonds are retired at 102, Kant Corporation pays $306,000 ($300,000 face value x 102%). Therefore, the entry to record the redemption will include a credit of $11,250 to Discount on Bonds Payable to bring the carrying value up to the face value of $300,000.

Kant Corporation Retires Its $300,000 Face Value Bonds at 102