Chang Company Retired Bonds with a Face Amount of ¥60,000,000

question 25

Multiple Choice

Chang Company retired bonds with a face amount of ¥60,000,000 at 98 when the carrying value of the bond was ¥59,780,000. The entry to record the retirement would include a

• A) gain on bond redemption of ¥980,000.
• B) loss on bond redemption of ¥980,000.
• C) loss on bond redemption of ¥1,200,000.
• D) gain on bond redemption of ¥1,420,000.

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Definitions:

Cash Cycle

The duration between the initial cash outlay for the purchase of inventory and the collection of cash from customers from sales, essentially measuring the liquidity efficiency of a company.

Purchasing Inventory

The process of acquiring goods and materials that a business sells or uses in its production process, an essential component of supply chain management.

Fixed Asset Sale

The process of selling long-term assets, such as property, plant, and equipment, for cash or other compensation.

Cash Increase

A rise in the amount of cash and cash equivalents held by a business.