A
company has bonds outstanding with a par value of $100,000. The
unamortized discount on these bonds is $4,500. The company retired these
bonds by buying them on the open market at 95. What is the gain or loss
on this retirement?
| $5,000 gain. | |
| $5,000 loss. | |
| $0 gain or loss. | |
| → | $500 gain. |
 | $500 loss. |
| Par value | $100,000 |
| Unamortized discount | 4,500 |
| | |
| Carrying value of bonds | $ 95,500 |
| Retirement price | 95,000 |
| | |
| Gain on retirement | $ 500 |
| |
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