Bond Retirement Goldman Corporation received $445,974 when it issued $400,000 of 8-year 10 percent bonds on January 1, 2002. The bonds pay interest at the end of each year. The market rate of interest for similar securities at the time of issue was 8 percent. Assuming Goldman uses straight-line amortization of the bond discount:

a. What is the carrying value of the bond liability at December 31, 2004?

b. If Goldman Corporation decides to reacquire the bonds at December 31, 2004, for $425,000, would it report a gain or a loss? What amount would be reported?

c. Why might Goldman Corporation wish to retire the bonds?