The situations presented here are independent of each other.
Instructions
For each situation prepare the appropriate journal entry for the redemption of the bonds.
(a) Garland Corporation retired $140,000 face value, 12% bonds on June 30, 2010, at 102. The carrying value of the bonds at the redemption date was $122,500. The bonds pay annual interest, and the interest payment due on June 30, 2010, has been made and recorded.
(b) Hutchison, Inc., retired $170,000 face value, 12.5% bonds on June 30, 2010, at 98. The carrying value of the bonds at the redemption date was $184,000. The bonds pay annual interest, and the interest payment due on June 30, 2010, has been made and recorded.