Assume the Following Account Balances Immediately After an Interest Payment $$\begin{array} { | l | r | } \hline \text { Bonds Payable } & \$ 200,000 \\\hline \text { Premium on Bonds Payable } & 10,000 \\\hline\end{array}$$

question 27

Multiple Choice

Assume the following account balances immediately after an interest payment date:
$$\begin{array} { | l | r | } \hline \text { Bonds Payable } & \$ 200,000 \\\hline \text { Premium on Bonds Payable } & 10,000 \\\hline\end{array}$$
If the bonds are retired immediately at a total cost of $205,000,the journal entry to record this event is:

• A)
• \(\begin{array}{|l|c|}
• \hline\text { Cash } & 205,000 \\
• \hline \text { Loss on Bond Retirement } & 5,000\\
• \hline \text { Premium on Bonds Payable } & 10,000 \\
• \hline \text { Bonds Payable } & 200,000\\\hline
• \end{array}\)
• B)
• \[\begin{array} { | c | l | }
• \hline \text { Bonds Payable } & 200,000 \\
• \hline \text { Premium on Bonds Payable } & 10,000 \\
• \hline \text { Cash } & 205,000 \\
• \hline \text { Gain on Bond Retirement } & 5,000\\
• \hline
• \end{array}\]
• C)
• \[\begin{array} { | c | l | }
• \hline \text { Bonds Payable } & 200,000 \\
• \hline \text { Loss on Bond Retirement } & 10,000 \\
• \hline \text { Premium on Bonds Payable } &5,000 \\
• \hline \text { Cash } & 205,000 \\
• \hline
• \end{array}\]
• D)None of these answers is correct.

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