Question

Clabber Company has bonds outstanding with a par value of $119,000 and a carrying value of $108,700. If the company calls these bonds at a price of $104,500, the gain or loss on retirement is:

Answer 1

Gain on retirement $4,200.00

Step-by-step explanation:

The computation of the gain or loss on retirement is given below;

Carrying value of Bond $108,700.00

Less; Price at which bond is called $104,500.00

Gain on retirement $4,200.00

Simply subtracted the called price of the bond from the carrying value of the bond so that the gain on retirement is recorded