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Prior to Maturity, Candy Apple Red Company Called and Retired

Question 94

Multiple Choice

Prior to maturity, Candy Apple Red Company called and retired a $1,200,000, 8% bond issued at 102. If the unamortized premium on the bonds is $3,000, the journal entry will include a:


A) Debit to bonds payable for $1,224,000
B) Debit to loss on bond retirement of $24,000
C) Credit to gain on bond retirement for $24,000
D) Debit to premium on bonds payable for $3,000

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