When a company retires bonds before maturity, the gain or loss on redemption is the difference between the cash paid and the

Question

Quizplus · Accepted Answer

The carrying value of the bonds represents their book value on the company's balance sheet, which includes any unamortized premium or discount on the bonds as well as any related issuance costs. Therefore, the gain or loss on redemption is calculated as the difference between the cash paid to retire the bonds and their carrying value.

When a Company Retires Bonds Before Maturity, the Gain or Loss