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How do I record gain or loss on retirement of bonds?
The December 31, 2004, balance sheet of Dodge Corporation includes the following items:
9% bonds payable due December 31, 2013 $1,400,000 Unamortized premium on bonds payable 37,800 The bonds were issued on December 31, 2003, at 103, with interest payable on December 31 of each year. Dodge uses straight-line amortization. On December 31, 2005, Dodge retired these bonds at 98 . What should Dodge record as a gain or loss on retirement of these bonds? |
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9% Bonds payable... Dr 140,0000
Premium on Bonds payable... Dr 37,800 To Cash 1,37,200 To gain on retirement of Bonds payable 40,600 |
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