On October 15, 2013, Rural Sales Has a Bond with Balances

question 143

Multiple Choice

On October 15, 2013, Rural Sales has a bond with balances as shown below. If Rural Sales wishes to retire the bonds for $82,000, what will be the effect on the income statement?

• A)Gain on retirement of $2,600
• B)Loss on retirement of $2,600
• C)Gain on retirement of $2,000
• D)Loss on retirement of $2,000

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Definitions:

Outstanding Checks

Checks that have been written and recorded in the account ledger but not yet cashed or cleared by the bank.

Availability Delay

The delay between the time a deposit is made into a bank account and the time those funds become accessible.

Mailing Time

The duration between when a mailpiece is sent and when it is received.

Processing

The act of handling or manipulating data, transactions, or physical items in a prescribed manner.