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A $307,000 bond was redeemed at 103 when the carrying amount of the bond was $318,973....

A $307,000 bond was redeemed at 103 when the carrying amount of the bond was $318,973. What amount of gain or loss would be recorded as part of this transaction? Select the correct answer. gain on bond redemption of $2,763. gain on bond redemption of $11,973. loss on bond redemption of $2,763. loss on bond redemption of $11,973.

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Answer #1

The bond face value is $307000 and it is redeemed at 103 that is 103% of $3,07,000.00

$3,07,000.00 * 103/100 = 3,16,210.00

The carrying amount of the bond was $318,973.

As the redemption amount is lower than the carrying amount of the bond, there is a gain of $2,763.00.

$3,18,973 - $3,16,210 = $2763

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