Wize University Introduction to Financial Accounting Textbook > Long-Term Liabilities
Retirement of Bonds at Maturity
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Retirement of Bonds at Maturity
At the maturity date of the bond, the borrower (issuer) must retire the bond by returning the face value to the lender (investor).
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Example: Retirement of Bond at Maturity
On April 1st, 2020 Apple Inc. issued a 5-year, annual, 6% coupon bond with a face value of $1,000,000. Prepare the journal entry to record the retirement of the bond at maturity on April 1st, 2025.
Practice: Retirement of Bonds at Maturity
On March 1st, 2021 Netflix Inc. is issuing a 5-year, quarterly, 9% coupon bond with a face value of $600,000. Prepare the journal entry to record the retirement of the bond at maturity assuming the market rate is 8%.
Transactions:
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