If $500,000 par value bonds with a carrying value of $476,000 are redeemed at 97, a loss on redemption will be recorded.

Name: If $500,000 par value bonds with a carrying value of $476,000 are redeemed at 97, a loss on redemption will be recorded.
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Question

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The carrying value of the bonds is $476,000, but they are being redeemed for 97% of their $500,000 par value, which is $485,000. This means there is a loss of $9,000 ($485,000 - $476,000) on the redemption.

If $500,000 Par Value Bonds with a Carrying Value of $476,000