Hooper Corporation has bonds outstanding with a face value of $100,000 and a carrying value of $103,000 on December 31,2013.If the company calls in and retires these bonds on December 31,2013,for $105,000,the entry to record the retirement would be:

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The carrying value of the bonds is $103,000, but the company is retiring the bonds for $105,000. Therefore, there is a loss on retirement of $2,000. In addition, there is unamortized bond premium of $3,000 that needs to be removed from the books. The entry to record the retirement of the bonds would be to debit Bonds Payable for $100,000, debit Loss on Retirement of Bonds for $2,000, debit Unamortized Bond Premium for $3,000, and credit Cash for $105,000.

Hooper Corporation Has Bonds Outstanding with a Face Value of $100,000