A $500,000 Bond Issue on Which There Is an Unamortized

question 140

Essay

A $500,000 bond issue on which there is an unamortized discount of $35,000 is redeemed for $475,000. Journalize the redemption of the bonds.

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Definitions:

Drawee

The party in a transaction upon whom a check, draft, or bill of exchange is drawn and is responsible for its settlement.

Payee

The person or entity to whom a check, draft, or electronic payment is made out and who is to receive the funds.

Posting

The act of publishing content or information on a digital platform, such as a blog, forum, or social media site.

Certified Check

A check that has been accepted by the bank on which it is drawn. Essentially, the bank, by certifying (accepting) the check, promises to pay the check at the time the check is presented.