Retirement of Debt
Illustrative Entries
| 6-30-X5 |
200,000 |
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| Loss on Bond Retirement |
15,800 |
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| Discount on Bonds Payable |
5,800 |
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| Cash |
210,000 |
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| To record retirement of debt (loss = $210,000 - ($200,000 - $5,800) = $15,800) |
Note: A gain instead of a loss would result if the price was less than the carrying amount of the debt.