On July 1, 2017, Adams Company has bonds with balances as shown below
Bonds Payable
71,000
Premium on Bonds Payable
3,800
If the company retires the bonds for $74,150, what will be the effect on the income statement?
A) gain on retirement of $6,950
B) loss on retirement of $6,950
C) gain on retirement of $650
D) loss on retirement of $650
C .Face value of the bonds being retired $71,000
Add: Premium on Bonds Payable 3,800
Carrying Amount of Bonds Payable $74,800
Market price paid to retire the bonds 74,150
Gain on retirement of Bonds Payable $650
You might also like to view...
In a market characterized by vigorous competition, look-alike products and customer loyalty that depends on quality relationships as well as quality products, the salesperson should fully utilize the:
A) product strategy B) customer strategy C) presentation strategy D) relationship strategy E) marketing strategy
Not meeting time, scope, and resource requirements are examples of external risks
Indicate whether the statement is true or false