Question

A $299,000 bond was redeemed at 104 when the carrying value of the bond was $354,000. The entry to record the redemption would include a

Oa. gain on bond redemption of $55,000.
Ob. loss on bond redemption of $43,040,
Oc. loss on bond redemption of $55,000
Od gain on bond redemption of $43,040,

Answer 1

Answer: gain on bond redemption of $43,040

Step-by-step explanation:

In this case, there will be a gain on bond redemption would be calculated as:

= Carrying value of bonds – Bonds redeemed amount

= $354000- {($299,000 / $100) × $104}

= $354000 - $310960

= $43040

Therefore, there'll be a gain on bond redemption of $43,040