If $500,000 par value bonds with a carrying value of $477,000 are retired when the market price is 97, a loss on retirement will be recorded.

Question

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The market price of 97 is below the carrying value of $477,000, indicating that the bonds have decreased in value. Therefore, retiring the bonds at this market price would result in a loss on retirement, which must be recorded in the financial statements.

If $500,000 Par Value Bonds with a Carrying Value of $477,000