When a company retires bonds early, the gain or loss on the retirement is the difference between the cash paid and the:
A)face value of the bonds.
B)original selling price of the bonds.
C)maturity value of the bonds.
D)carrying value of the bonds.

Question

Quizplus · Accepted Answer

The gain or loss on early retirement of bonds is calculated as the difference between the cash paid to retire the bonds and the carrying value of the bonds, which is the face value adjusted for any unamortized premium or discount.

When a Company Retires Bonds Early, the Gain or Loss