Mandel Corp.retired bonds payable with a carrying value of $980,000.What effect does this transaction have on these accounts?

Question

Quizplus · Accepted Answer

Retiring bonds payable means paying off the debt. Therefore, the bonds payable account will decrease by the full amount of $980,000. The corresponding effect will be a decrease in the total liabilities of Mandel Corp. There will be no impact on the assets or equity of the company.