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Journal Entries for Bonds at Par

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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.

Question Juliet Corp., the trusted car designer, sold a bond for $100,000. It pays 2% interest at the end of each year.
What is the journal entry for the retirement of the bond?
Answer