A company retired $200,000 of bonds,which have an unamortized premium of $8,000,by purchasing them on the open market for $210,000.What is the amount of the gain or loss on the retirement of the bonds?
A)There was a $10,000 loss.
B)There was a $2,000 loss.
C)There was a $10,000 gain.
D)There was an $18,000 loss.

Question

Quizplus · Accepted Answer

The company retired the bonds for $210,000, but the carrying amount of the bonds was $200,000 plus the unamortized premium of $8,000, totaling $208,000. The difference between the retirement cost ($210,000) and the carrying amount ($208,000) is a $2,000 loss.

A Company Retired $200,000 of Bonds,which Have an Unamortized Premium