A $100,000 bond issue with a carrying value of $94,000 is called at 102 and retired.The entry to record the retirement of bonds would be:
A) Bonds Payable 100,000
Loss on Retirement of Bonds 8,000
Unamortized Bond Discount 6,000
Cash 102,000
B) Bonds Payable 94,000
Cash 94,000
C) Bonds Payable 100,000
Gain on Retirement of Bonds 6,000
Cash 94,000
D) Bonds Payable 100,000
Loss on Retirement of Bonds 2,000
Cash 102,000

Question

Quizplus · Accepted Answer

The bonds payable is debited for the face value of $100,000. The cash paid is $102,000 (102% of $100,000). The unamortized bond discount of $6,000 is debited. The loss on retirement is the difference between the cash paid and the carrying value, which is $8,000.

A $100,000 Bond Issue with a Carrying Value of $94,000