Two independent situations follow:
1. Longbine Corporation redeemed $130,000 face value, 12% bonds on June 30, 2017, at 102. The bonds' amortized cost at the redemption date was $117,500. The bonds pay annual interest, and the interest payment due on June 30, 2017, has been made and recorded.
2. Tastove Inc. redeemed $150,000 face value, 12.5% bonds on June 30, 2017, at 98. The bonds' amortized cost at the redemption date was $151,000. The bonds pay annual interest, and the interest payment due on June 30, 2017, has been made and recorded.
Instructions
For each situation above, prepare the appropriate journal entry for the redemption of the bonds.