The Titan retires a $24.6 million bond issue when the carrying value of the bonds is $22.2 million, but the market value of the bonds is $28.3 million. The entry to record the retirement will include: Multiple Choice A credit to cash for $22.2 million. A credit of $6.1 million to a gain account. A debit of $6.1 million to a loss account. No gain or loss on retirement.

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Mac

Business

23 January, 11:40

The Titan retires a $24.6 million bond issue when the carrying value of the bonds is $22.2 million, but the market value of the bonds is $28.3 million. The entry to record the retirement will include: Multiple Choice A credit to cash for $22.2 million. A credit of $6.1 million to a gain account. A debit of $6.1 million to a loss account. No gain or loss on retirement.

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Answers (1)

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Dana · Answer 1

A debit of $6.1 million to a loss account

Explanation:

The answer is A debit of $6.1 million to a loss account.

To calculate this:

the carrying value of the bonds $22.2 million is subtracted from the market value of the bonds $28.3 million.

Carrying value, $22.2 million, less cash paid to retire the bonds of $28.3 million

= $28.3 - $22.2

= $6.1 million to a loss account.