Answered

Westonci.ca is your go-to source for answers, with a community ready to provide accurate and timely information. Our platform provides a seamless experience for finding reliable answers from a knowledgeable network of professionals. Discover in-depth answers to your questions from a wide network of professionals on our user-friendly Q&A platform.

On January 1, MJKB Incorporated exercises a call option that requires MJKB to pay $315,000 for its outstanding bonds that have a carrying value of $319,000 and a par value of $310,000. The company exercises the call option after the semiannual interest payment was made the day before (December 31). The entry to retire the bonds does not include which of the following? Multiple Choice Debit to Bonds Payable $315,000. Debit to Premium on Bonds Payable $9,000. Credit to Gain on Retirement of Bonds of $4,000. Credit to Cash of $315,000. Debit to Bonds Payable $310,000.

Sagot :

Parrain

When retiring the bond, the entry that will not be included is A.  Debit to Bonds Payable $315,000.

How is a bond retired ?

When a bond is retired, it means that the company will be paying off the total value of the bond and therefore removing it as a debt from its books. The interest to be paid on the bond, and its current market value are considered.

The bonds payable account for  MJKB Incorporated will be debited by the amount of $ 310, 000 which is the par value of the bond and not the amount that was paid for the bond. The amount that was paid of $ 315, 000 will be credited to cash to show that the cash account is decreasing. This means that the bonds payable account will be debited with $ 310, 000 and not $ 315, 000.

Find out more on retiring bonds at https://brainly.com/question/29609509

#SPJ1

Thank you for visiting. Our goal is to provide the most accurate answers for all your informational needs. Come back soon. Thank you for choosing our platform. We're dedicated to providing the best answers for all your questions. Visit us again. Discover more at Westonci.ca. Return for the latest expert answers and updates on various topics.