If $100,000 face value bonds with a carrying value of $95,200 are redeemed at 97, a loss on redemption will be recorded.

Name: If $100,000 face value bonds with a carrying value of $95,200 are redeemed at 97, a loss on redemption will be recorded.
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Question

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When bonds with a carrying value of $95,200 are redeemed at 97% of their face value ($100,000 * 97% = $97,000), the redemption price ($97,000) is higher than the carrying value ($95,200), resulting in a loss on redemption.

If $100,000 Face Value Bonds with a Carrying Value of $95,200