A $200,000 Bond Issue with a Carrying Value of $194,000

question 185

Multiple Choice

A $200,000 bond issue with a carrying value of $194,000 is called at 101 and retired.The entry to record the retirement of bonds would be:

• A) Bonds Payable 200,000
• Gain on Retirement of Bonds 6,000
• Cash 194,000
• B) Bonds Payable 200,000
• Cash 200,000
• C) Bonds Payable 200,000
• Loss on Retirement of Bonds 8,000
• Unamortized Bond Discount 6,000
• Cash 202,000
• D) Bonds Payable 194,000
• Loss on Retirement of Bonds 8,000
• Cash 202,000

---

Definitions:

APS

Acronym for Average Propensity to Save, which is the ratio of total savings to total income in an economy, indicating how much people save on average per unit of income.

Investment

Assigning financial resources in the hope of creating revenue or gains.

GDP

Stands for Gross Domestic Product, which is the total value of all goods and services produced within a country's borders in a specific time period.

Accounting Firm

A business that provides a wide range of accounting services such as audit, bookkeeping, tax preparation, and consulting to individuals and organizations.