Goethe Corporation redeems its $100,000 face value bonds at 105 on January 1, following the payment of

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Goethe Corporation redeems its $100,000 face value bonds at 105 on January 1, following the payment of interest. The carrying value of the bonds at the redemption date is $103,745. The entry to record the redemption will include a:

(a) credit of $3,745 to Loss on Bond Redemption.

(b) debit of $3,745 to Premium on Bonds Payable.

(c) credit of $1,255 to Gain on Bond Redemption.

(d) debit of $5,000 to Premium on Bonds Payable.AppendixLO2

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