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Question 3 A $515000 bond was retired at 98 when the carrying value of the bond was $505000. The entry to record the retireme
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Answer #1
As the carrying value is less than face value of bond, there is unamortized discount on bonds payables.
Discount on bonds payable = Face value - Carrying value = 515000 - 505000 10000
Value at which bonds are retired = 515000 * 98 / 100 504700
Journal entry for retirement of bonds :
Dr. Cr.
Bonds payable 515000
   Cash 504700
   Discount on bonds payable 10000
   Gain on bond redemption 300
So, the answer is : Gain on bond redemption of $300
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