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What is the gain or loss on redemption

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Q1. A bond with a face value of $300,000 is redeemed at 103 when the amortized cost ( carrying value ) of the bond is $315,000. The journal entry to record the redemption would include:

A) A loss on bond redemption of $6,000

B) A gain on bond redemption of $6,000

C) A gain on bond redemption of $9,000

D) A loss on bond redemption of $9,000

Q2. A corporation has Bonds Payable with a face value of $1,000,000 and an amortized cost (carrying value) of $985,000. If the corporation redeems the bonds at 97.5, what is the gain or loss on redemption?

A) $10,000 loss

B) $10,000 gain

C) $25,000 loss

D) $25,000 gain

Reference no: EM132604245

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