Answer:
Dr Bonds Payable $500,000
Dr Premium on Bonds Payable $8,000
Cr Gain on Bond Redemption $28,000
Cr Cash $480,000
Explanation:
Preparation of the journal entry to record the redemption of the bonds.
Dr Bonds Payable $500,000
Dr Premium on Bonds Payable $8,000
($508,000-$500,000)
Cr Gain on Bond Redemption $28,000
($500,000+$8,000-$480,000)
Cr Cash $480,000
($500,000 × 96%)
(To record the redemption bonds)
