Bonds Payable has a balance of $1,000,000 and Discount on Bonds Payable has a balance of $15,500. If the issuing corporation redeems the bonds at 98 1/2, what is the amount of gain or loss on redemption?

Question

Quizplus · Accepted Answer

Loss on redemption = Redemption value of bonds + Balance of Discount on Bonds Payable- Balance of Bonds Payable = ($1,000,000 × 0.985) + $15,500 - $1,000,000 = $985,000 + $15,500 - $1,000,000 = $500

Bonds Payable Has a Balance of $1,000,000 and Discount on Bonds