The journal entry to record payment of bond payable at maturity will include a:
A) debit to bonds payable, credit to premium on bonds payable and a credit to cash.
B) debit to cash and a credit to bonds payable.
C) debit to bonds payable and a credit to cash.
D) debit to bonds payable, debit to discount on bonds payable and a credit to cash.

Question

Quizplus · Accepted Answer

When a bond is paid off at maturity, the bond issuer will debit bonds payable to remove the liability from its books and credit cash to reflect the payment made. Thus, the correct option is to debit bonds payable and credit cash. There will be no recognition of any premium or discount on the bond payable, as it has matured and no longer carries any market value adjustments.

The Journal Entry to Record Payment of Bond Payable at Maturity