Douglas County Fairgrounds retires a $50 million bond issue when the carrying value of the bonds is $52 million, but the market value of the bonds is only $47 million. The entry to record the retirement will include:

A credit of 5 million to gain account

Explanation:

In this question, we are asked to state the entry to record retirement.

we employ a mathematical approach to this.

Mathematically;

Gain (Loss) on bond redemption

= Carrying value of bonds - Cash paid

From the question, we can identify a carrying value of 52 million and a market value of 47 million which is the cash paid

= 52 million - 47 million

= 5 million