A $300,000 bond was redeemed at 98 when the carrying value of the bond was $296,000. The entry to record the redemption would include a
A) loss on bond redemption of $4,000.
B) gain on bond redemption of $4,000.
C) gain on bond redemption of $2,000.
D) loss on bond redemption of $2,000.

Question

Quizplus · Accepted Answer

The bond was redeemed at 98% of $300,000, which is $294,000. The carrying value was $296,000, resulting in a gain of $2,000 ($296,000 - $294,000).

A $300,000 Bond Was Redeemed at 98 When the Carrying