To determine the gain or loss on the retirement of bonds before their maturity date:
A)if the carrying value of the bonds exceeds the market price of the bonds, there is a loss on retirement.
B)if the carrying value of the bonds is less than the market price of the bonds, there is a loss on retirement.
C)there can be no gain or loss on the retirement of the bonds.
D)if the par value of the bonds exceeds the market price of the bonds, there is a loss on the retirement.

Question

Quizplus · Accepted Answer

If the carrying value of the bonds is less than the market price, the company pays more to retire the bonds than the amount recorded, resulting in a loss.

To Determine the Gain or Loss on the Retirement of Bonds