Final answer:
We cannot determine the loss Nixon Company should record on early retirement of bonds without specific financial details, as the loss is calculated by the difference between the cash paid (including the premium) and the net carrying amount of the bonds.
Step-by-step explanation:
When Nixon Company's bonds are described as having a net carrying amount, being issued at a discount, and retired at a premium, this means that the bonds were originally sold for less than their face value (discount) and were bought back for more than their net carrying amount (premium), at the time of retirement. The loss on early retirement of bonds is calculated by comparing the cash paid to retire the bonds and the net carrying amount of those bonds. If the cash paid (which includes the premium) exceeds the net carrying amount, the difference is considered a loss. Since the question does not provide specific numbers, it is impossible to calculate the exact loss Nixon Company should record. The correct answer would depend on the face value of the bonds, the discount at which they were issued, the carrying amount at the time of retirement, and the premium paid for retirement. Therefore, without the actual financial figures, we cannot determine whether a $16,000, $50,400, $44,800, or $56,000 loss should be recorded. To answer this question correctly, additional financial details are required.