$5,000 (Face Value)of Bonds with a Book Value of $4,300

question 37

Multiple Choice

$5,000 (face value) of bonds with a book value of $4,300 was retired 4 years and 9 months prior to maturity.The dollar amount (excluding interest) paid to retire the bonds was $4,700.The entry to record the retirement would include:

• A)dr.bonds payable $5,000
• B)cr.unusual gain $400
• C)dr.bonds payable $4,700
• D)cr.cash $4,300

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Definitions:

Social Security Portion

The part of income that goes towards Social Security contributions, typically seen on payroll statements.

Annual Wage Base

The maximum amount of earnings on which employees must pay Social Security taxes in a given year.

FUTA Tax

Federal Unemployment Tax Act tax, an employer-paid tax used to fund state workforce agencies.

Maximum Credit

Refers to the highest amount of credit a taxpayer can claim on their tax return, which directly reduces their tax liability.