When recording a retirement of bonds, a company must account for all of the following EXCEPT
A) the payment of cash to the bondholders.
B) the removal of the bond from the company's accounting records.
C) the recognition of any gain or loss on redemption.
D) the receipt of cash from the bondholders.

Question

Quizplus · Accepted Answer

When a company retires bonds, it involves paying off the bondholders (A), removing the bond liability from its accounting records (B), and recognizing any gain or loss on the redemption (C). The company does not receive cash from the bondholders in this process; instead, it pays cash out to them.

When Recording a Retirement of Bonds, a Company Must Account