A $600,000 Bond Was Retired at 102 When the Carrying

question 78

Multiple Choice

A $600,000 bond was retired at 102 when the carrying value of the bond was $622,000. The entry to record the retirement would include a

• A)gain on bond redemption of $12,000.
• B)loss on bond redemption of $10,000.
• C)loss on bond redemption of $12,000.
• D)gain on bond redemption of $10,000.

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Definitions:

Credit Memorandum

A document issued by a seller that reduces the amount owed by a buyer, typically due to a return or refund.

Note Receivable

A written promise for the amounts to be received by a party, often including interest, by another party.

Adjusted Cash Balance

The cash amount shown on a company's financial statements after adjustments for checks outstanding, deposits in transit, and other necessary adjustments.

NSF Check

A check that cannot be processed because the writer's account does not have sufficient funds, commonly known as a bounced check.