On January 1, 2017, Monty Corporation redeemed $630,000 of bonds at 98. At the time...
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On January 1, 2017, Monty Corporation redeemed $630,000 of bonds at 98. At the time of redemption, the unamortized premium was $18,900. the journal entry would be Bonds payable... 630,000 Premiun on bods payable 18,900
Cash....617, 400 gain on redemption .....31,500
I don't understand this journal. I undertand I have to debit bondpayable to get rid of payable. Why there is gain on redemption, and also,unamortized premium of $18,900 is bookvalue of the bond?
Please help me. Thanks!
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