Assume the Following Account Balances Immediately After an Interest Payment $\begin{array} { | l | r | } \hline \text { Bonds Payable } & \$ 100,000 \\\hline \text { Premium on Bonds Payable } & 5,000 \\\hline\end{array}$

question 108

Multiple Choice

Assume the following account balances immediately after an interest payment date: $\begin{array} { | l | r | } \hline \text { Bonds Payable } & \$ 100,000 \\\hline \text { Premium on Bonds Payable } & 5,000 \\\hline\end{array}$ If the bonds are retired immediately at a total cost of $104,000,the journal entry to record this event is:

• A) \(\begin{array}{|l|lcc|}
• \hline \text { Cash} &104,000\\
• \hline \text { Loss on Bond Retirement} &1,000\\
• \hline \text { Premium on Bonds Payable} & 5,000\\
• \hline\text { Bonds Payable } &100,000\\
• \hline
• \end{array}\)
• B) \(\begin{array}{|l|lcc|}
• \hline \text { Bonds Payable} &100,000\\
• \hline \text { Premium on Bonds Payable} &5,000\\
• \hline \text {Cash} &104,000\\
• \hline\text { Gain on Bond Retirement } &1,000\\
• \hline
• \end{array}\)
• C) \(\begin{array}{|l|lcc|}
• \hline \text {Bonds Payable } & 100,000\\
• \hline \text { Loss on Bond Retirement } &9,000\\
• \hline \text { Premium on Bonds Payabl } & 5,000\\
• \hline\text { Cash } & 104,000\\
• \hline
• \end{array}\)
• D)None of these answers are correct.

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