A $300,000 bond was redeemed at 104 when the carrying value of the bond was $315,000. The entry to record the redemption would include a
A) loss on bond redemption of $3,000.
B) gain on bond redemption of $3,000.
C) gain on bond redemption of $4,000.
D) loss on bond redemption of $4,000.

Question

Quizplus · Accepted Answer

The carrying value of the bond is $315,000 and it was redeemed at 104, which means it was redeemed for $300,000 x 1.04 = $312,000. Therefore, there is a gain on bond redemption of $312,000 - $315,000 = $3,000.

A $300,000 Bond Was Redeemed at 104 When the Carrying