A $600000 Bond Was Retired at 98 When the Carrying

question 87

Multiple Choice

A $600000 bond was retired at 98 when the carrying value of the bond was $590000. The entry to record the retirement would include a

• A) gain on bond redemption of $10000.
• B) loss on bond redemption of $10000.
• C) loss on bond redemption of $2000.
• D) gain on bond redemption of $2000.

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Definitions:

Subsequent Periods

Time frames following the current reporting period, often relevant in financial forecasting and analysis.

Individual Accounts

Financial records or statements that pertain to a single individual or entity, detailing their financial transactions and position.

Deferred Tax Asset

An accounting term representing a future tax benefit that results from the difference between the accounting and tax treatment of a transaction, recognizable in future periods when taxes are settled.

Deferred Tax Liability

A tax obligation that a company owes but does not have to pay until a future date, often due to timing differences in recognizing income and expenses.