A $600,000 bond was retired at 102 when the carrying value of the bond was $622,000. The entry to record the retirement would include a Select one: a. gain on bond redemption of $10,000. b. loss on bond redemption of $12,000. c. loss on bond redemption of $10,000 d. gain on bond redemption of $12,000.

As the carrying value of the bond is up to $622,000, while the redemption only takes the company 600,000 x 102% = $612,000 ( that is, it takes $612,000 cash to clear $622,000 liabilities); the entry will include a gain on bond redemption of $10,000 which is calculated as $622,000 - $612,000 = $10,000.

Details entry should be:

Dr Bond payable 600,000

Dr Premium on bond 22,000

Cr Cash 612,000

Cr Gain on bond redemption 10,000

abiolataiwo2015 abiolataiwo2015 · Answer 2 · 2021-12-03T11:46:35+01:00

The entry to record the retirement would include a: a. gain on bond redemption of $10,000.

Based on the information the appropriate entry to record the bond retirement would be gain on bond redemption of the amount of $10,000 which is calculated as:

Gain on bond redemption=$622,000- ($600,000 x 102%)

Gain on bond redemption=$622,000- $612,000

Gain on bond redemption=$10,000

Inconclusion the entry to record the retirement would include a: a. gain on bond redemption of $10,000.

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