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A $500,000 bond is retired at 97 when the carrying value of the bond is $483,000
A $500,000 bond is retired at 97 when the carrying value of the bond is $483,000. The entry to record the retirement would include a:
a. $2,000 gain.
b. $15,000 loss.
c. $15,000 gain.
d. $2,000 loss.
Expert Solution
Answer:
d .
Step-by-Step explanation
The entry to record the retirement is as follows:
Bonds Payable-----------Debit-----------$483,000
Loss on retirement------Debit---------------$2,000
Cash account------------Credit----------------$485,000
Therefore, loss on retirement is $2,000.
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