On September 10, 2009, Humbert Company issued bonds with a face value of $600,000 for a price of 102. During 2012, Humbert exercised a call provision and redeemed the bonds for 101. At the time of the redemption, the bonds had a balance sheet value of $607,000. The journal entry to record the redemption includes:
a. a credit to Gain on Redemption for $1,000.
b. a debit to Premium on Bonds for $7,000.
c. a credit to Discount on Bonds for $7,000.
d. a credit to Bonds Payable for $600,000.

Question

Quizplus · Accepted Answer

The Answer of On September 10, 2009, Humbert Company issued bonds with a face value of $600,000 for a price of 102. During 2012, Humbert exercised a call provision and redeemed the bonds for 101. At the time of the redemption, the bonds had a balance sheet value of $607,000. The journal entry to record the redemption includes:
a. a credit to Gain on Redemption for $1,000.
b. a debit to Premium on Bonds for $7,000.
c. a credit to Discount on Bonds for $7,000.
d. a credit to Bonds Payable for $600,000.

On September 10, 2009, Humbert Company Issued Bonds with a Face