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

Question

Quizplus · Accepted Answer

The bond was retired for $294,000 ($300,000 x 98%) when its amortized cost was $296,000, resulting in a gain of $2,000 ($296,000 - $294,000).

A $300,000 Bond Was Retired at 98 When the Amortized