Medina Optical Supply

Redemption of Bonds issued at a Discount

Medina Optical Supply sold bonds at a discount for $420,000 (discount of $20,000) 8 years ago.

a) The corporation redeems $25,000 of this issue at 94. The unamortized discount is $250.

b) The corporation redeems $30,000 of this issue at 101. The unamortized discount is $300.

Prepare journal entries to record the redemption in a) and b).

for a) I have the account titles correct

Bonds Payable The Debit amount is $25,000

Discount on Bonds Payable

Gain on Bonds Redeemed

Cash

b) Bonds Payable has a debit of $30,000

Loss on Bonds Redeemed

Discount on Bonds Payable

Cash