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Question
On January 1, 2013, Jacob issued $600,000 of 11%, 15-year bonds at a price of 102. The straight-line method is used to amortize any bond discount or premium and interest is paid semiannually. All interest has been accounted for (and paid) through December 31, 2018. The company retires 30% of these bonds by buying them on the open market at 98 .
What is the journal entry to record the retirement of 30% of the bonds on January 1, 2019?
A.
| Bonds Payable | 180,000 | |
| Cash | 177,300 | |
| Discount on Bonds Payable | 2,700 |
B.
| Bonds Payable | 180,000 | |
| Loss on Retirement | 11,815 | |
| Discount on Bonds Payable | 2,700 | |
| Cash | 177,300 |
C.
| Bonds Payable | 180,000 | |
| Discount on Bonds Payable | 2,700 | |
| Gain on Retirement | 177,300 | |
| Cash | 5,400 |
D.
| Bonds Payable | 180,000 | |
| Premium on Bonds Payable | 2,700 | |
| Gain on Retirement | 5,400 | |
| Cash | 177,300 |
E.
| Bonds Payable | 180,000 | |
| Cash | 180,000 |
Answer
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