Accountancy Forum

Help! I am stuck with regards to the following.

On Jan 1, 2005, X Company has a bond payable of $200,000. During 2005, it pays off $20,000 of the outstanding bond principal and issues a new $70,000 bond. There are no other transactions related to the bond payable account.

How would you recommend I find X company's December 31, 2005 bond payable balance? I'm guessing it's either a debit balance of $250,000, or of $150,000, or a credit balance of $150,000 or $250,000 but I'm not sure how to figure out which is correct.

Thank you for your help )

just make a T account of this and u will get the Answer of this.
its so simple

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by snyk8122</i>
<br />Help! I am stuck with regards to the following.

On Jan 1, 2005, X Company has a bond payable of $200,000. During 2005, it pays off $20,000 of the outstanding bond principal and issues a new $70,000 bond. There are no other transactions related to the bond payable account.

How would you recommend I find X company's December 31, 2005 bond payable balance? I'm guessing it's either a debit balance of $250,000, or of $150,000, or a credit balance of $150,000 or $250,000 but I'm not sure how to figure out which is correct.

Thank you for your help )
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">

Bonds Payable is a liablity account by nature, so any positive balance will always be shown on credit side, and decrease has to be shown on debit side. Based on these facts;

Credit Balance in Bonds payable was initially.------------------------$200,000
Redemptions of Bonds will be debited to bonds payable account---------$20,000
New Issuance will be credited to account -----------------------------$70,000

Bonds payable account should indicate Credit balance-------------------$250,000 at the end.

Ajnabi