(Solution) - The company has bonds payable with a total face -(2025 Original AI-Free Solution)

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Academic Level: Undergrad. (yrs 3-4)

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The company has bonds payable with a total face value of $100,000 and a carrying value of $103,000. In addition, unpaid interest on the bonds has been accrued in the amount of $6,000. The lender has agreed to the settlement of the bonds in exchange for land worth $90,000. The land has a historical cost of $64,000. Make the journal entry necessary on the books of the borrower to record this settlement of the bonds payable.