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A corporation retired $670,000 face value of bonds, which have an unamortized discount of $27,000, by repurchasing them for $670,000. How much was the gain or loss on the retirement of the bonds

1 Answer

12 votes

Answer:

$27,000 loss

Step-by-step explanation:

gain/loss on retirement of bonds = carrying value - retirement cost

  • carrying value = $670,000 - $27,000 = $643,000
  • retirement cost = $670,000

gain/loss on retirement of bonds = $643,000 - $670,000 = -$27,000

Dr Bonds payable 670,000

Dr Loss on retirement of bonds 27,000

Cr Cash 670,000

Cr Discount on bonds payable 27,000

User Sushant Aryal
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