A Corporation Retired $200,000 of Bonds Which Have an Unamortized

question 56

Multiple Choice

A corporation retired $200,000 of bonds which have an unamortized premium of $8,000,by repurchasing them for $210,000.How much was the gain or loss on the retirement of the bonds?

• A)There was a $10,000 loss.
• B)There was a $2,000 loss.
• C)There was a $10,000 gain.
• D)There was an $18,000 loss.

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Definitions:

Premium

The amount paid for an insurance policy or the additional amount above the nominal value of a security or investment.

Motorcycle Gang

An organized group of motorcyclists who may partake in activities ranging from community events to illegal operations.

Insurance Company

An organization that provides insurance policies to subscribers, covering a range of risks in exchange for premiums.

Fire

A rapid oxidation process that generates heat, light, and various reaction products, often used for energy or seen as a risk for damage.