A $100,000 Bond Was Retired at 97 When the Carrying

Multiple Choice

A $100,000 bond was retired at 97 when the carrying amount of the bond was $102,500. The entry to record the retirement would include a

A) gain on bond redemption of $2,500.
B) loss on bond redemption of $2,500.
C) loss on bond redemption of $5,500.
D) gain on bond redemption of $5,500.
Use the information below to answer questions 134-136.
Sun and Surf Inc issues $200,000 of 4%, 5-year bonds for cash proceeds of $182,940. The market interest rate is 6%. Interest is paid semi-annually.