nashville rail co. issued $100,000 in 10 - year bonds in 2009 at 103. the final interest payment was made…

nashville rail co. issued $100,000 in 10 - year bonds in 2009 at 103. the final interest payment was made and recorded. what entry will nashville record for the redemption of its bonds at maturity?\n\nbonds payable 100,000\ncash 100,000\n\nbonds payable 103,000\ngain on bonds redemption 3,000\ncash 100,000\n\nbonds payable 103,000\npremium on bonds payable 3,000\ncash 100,000\n\nbonds payable 103,000\ncash 103,000

nashville rail co. issued $100,000 in 10 - year bonds in 2009 at 103. the final interest payment was made and recorded. what entry will nashville record for the redemption of its bonds at maturity?\n\nbonds payable 100,000\ncash 100,000\n\nbonds payable 103,000\ngain on bonds redemption 3,000\ncash 100,000\n\nbonds payable 103,000\npremium on bonds payable 3,000\ncash 100,000\n\nbonds payable 103,000\ncash 103,000

Answer

Brief Explanations:

When bonds are redeemed at maturity, the company pays the face - value amount of the bonds to the bondholders. The bonds have a face value of $100,000. The premium (if any) has already been amortized over the life of the bonds. So, the company debits Bonds Payable (at face value) and credits Cash for the amount paid to bondholders, which is the face value of the bonds.

Answer:

Bonds Payable 100,000 Cash 100,000