If bonds of $1,000,000 with unamortized discount of $10,000 are redeemed at 98, the gain on redemption of bonds is $10,000.

Name: If bonds of $1,000,000 with unamortized discount of $10,000 are redeemed at 98, the gain on redemption of bonds is $10,000.
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The bonds are redeemed at 98% of $1,000,000, which is $980,000. The carrying amount is $990,000 ($1,000,000 - $10,000 discount). The gain is $990,000 - $980,000 = $10,000.

If Bonds of $1,000,000 with Unamortized Discount of $10,000 Are