Magic Mountain retires its 8% bonds for $124,000 before their scheduled maturity. At the time, the bonds have a face value of 122,000 and a carrying value of $114,000. Record the early retirement of the bonds. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Journal entry

Explanation:

The recording of the early retirement of the bonds is shown below:

Bond payable $122,000

Loss on the redemption of bonds $10,000

      To Bond discount amortization $8,000   ($122,000 - $144,000)

      To Cash $124,000  

(Being recording of early retirement of the bonds is made)  

The balancing figure is to be debited to Loss on the redemption of bonds