1. Multistar Inc. has decided to redeem one-half of its Bonds Payable. The bonds have a total face value of $300,000. In accordance with the bond contract, Multistar Inc. may redeem the bonds at 103. Immediately before the redemption, the Balance Sheet for Multistar Inc. reports:

10% Bonds Payable $314,800

What is the amount of the gain or loss on redemption?

A) loss of $4,722

B) loss of $2,900

C) gain of $2,900

D) gain of $4,722

2. Land is acquired by issuing 500 common shares. The land has a current market value of $12,000. There is no market value for the common shares available. The journal entry requires a:

A) debit to Cash for $12,000

B) debit to Common Shares for $12,000

C) credit to Retained Earnings for $12,000

D) credit to Common Shares for $12,000