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17 June, 15:26

Action Company sells bond investments classified as trading securities for $99,000. The face amount is $100,000; unamortized discount is $2,000. What must be included in the journal entry to record the sale?

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  1. 17 June, 15:27
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    Cash $99,000

    Unamortized discount $2,000

    To Gain on redemption of bond $1,000

    To bond payable $100,000

    Explanation:

    As the company has sold the bond it has transferred the unamortized loss to profit and loss.
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