Question

he journal entry on the maturity date to record the retirement of bonds with a face value of $2,500,000 that were issued at a $90,000 discount includes A. a debit to Discount on Bonds Payable for $90,000. B. a credit to Cash for $2,590,000. C. a debit to Bonds Payable for $2,500,000. D. all of the above.

Answer 1

The journal entry for retiring a bond with such a face value is C. a debit to Bonds Payable for $2,500,000.

When a bond is being retired, the correct entry is:

• Debit bonds payable with the face value
• Credit cash with the face value

In this scenario, the face value is $2,500,000 which means that the correct entry would be to debit Bonds Payable with $2,500,000.

In conclusion, retiring a bond of such a face value requires debiting bonds payable with $2,500,000.

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