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On July 1, 2017, Adams Company has bonds with balances as shown below. If the company retires the bonds for $70,150, what will be the effect on the income statement? A. loss on retirement of $1.650 B. gain on retirement of $5,950 C. gain on retirement of $1,650 D. loss on retirement of $5,950
Expert Answer
| c gain on retirement of 1650 | |
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| Statementshowing Computations | |
| Paticulars | Amount |
| Balance in bonds payable Cr | 68,000.00 |
| Premium on bonds payable Cr | 3,800.00 |
| Total Balance = 68000 + 3800 | 71,800.00 |
| Redemption Amount | 70,150.00 |
| Gain on retirement = 71800 – 70150 | 1,650.00 |
