Journal Entries for Bonds at Par
Lesson:
There are three basic transactions that involve bonds:
- Issuing a bond
- Paying the interest on the bond (often yearly)
- Retiring the bond
This module will let you practice each of the above on a bond sold at face value.
You're being grilled by the board of directors about the firm's accounting.
What is the journal entry for the retirement of the bond?
Answer:
-
Bonds Payable $38,000.00 Cash $38,000.00