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    Classic1's Avatar
    Classic1 Posts: 1, Reputation: 1
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    #1

    Jun 2, 2008, 04:45 PM
    Journal Entry for Bonds
    What is the journal entry for $15,000 bonds which sold for $13,000?

    I think it should be

    DR. Bonds Payable $15,000
    DR. Loss on Redemption of bonds $2000
    CR Cash $13,000
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    Jun 2, 2008, 08:28 PM
    Who is doing the selling? "Selling" bonds means the company is issuing bonds to bondholders. Since bonds are debt, they are actually borrowing money from the investors. It's not like selling an asset.

    You're calling it "selling" for $13,000. But your entry looks like a redemption of bonds. That isn't the same thing. Redeeming the bonds is basically paying the bonds back, not selling them. And if that is the case, it would depend on whether there's any unamortized discount or premium.

    Since you have paraphrased the problem, I'm not sure if you've stated it correctly, or if there's any missing information. But as is, it doesn't work. And you need to clarify things a bit.
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