If a company repurchases bonds with a $1,000,000 maturity value for $1,020,000 when their book value is $950,000,a loss of $20,000 will be reported.

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The loss on the bond retirement ($70,000) is the difference between the amount paid for the bond ($1,020,000) and the book value of the bond ($950,000). A loss occurs when the payment exceeds the bond's book value.

If a Company Repurchases Bonds with a $1,000,000 Maturity Value