On February 1, 2011, a company decides to retire a bond that last paid interest on December 31, 2010; the gain or loss on retirement is calculated as the difference between the price to retire and the carrying value of the bond on December 31, 2010.

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The gain or loss on retirement of a bond is calculated as the difference between the price to retire the bond and the carrying value of the bond on the date of retirement, not on the date of the last interest payment.

On February 1, 2011, a Company Decides to Retire a Bond