d) After completing all of the entries in Exercise 10, what is the correct amount recorded to the Loss on Retirement of Bonds account? See circle on the printed exercise.

Example 9: Review the completed example below A company has a $500,000 callable bond with a $7,000 premium on the books. These balances are reflected in the t-accts below. The bond is retired at a price of 102. Review these steps to record the retirement entry 1) Determine how much cash must be paid and record in the T-acct. $500,000 x 1.02 $510,000 2) Record entry to zero out the Bonds Payable account. 3) Record entry to zero out the Premium account 4) Add up your debits and credits to this point. If you need a debit to balance out the entry, record it to a "Loss on Retirement of Bonds" account. If you need a credit to balance out the entry, record it to a "Gain on Retirement of Bonds account. In this example, a loss is recorded Loss on Retirement of Bonds Premium on Bonds Cash Bonds Payable Payable 500,000 bal 7,000 bal 510,000 500,000 7,000 3,000 What if the bonds were called at a price of 101? $500,000 x 1.01-505,000 Gain on Retirement of Bonds Premium on Bonds Cash Bonds Payable Payable 500,000 bal 7,000 bal 505,000 500,000 7,000 2,000 Example 10: Use the t-accounts below to record the following bond retirement. A $200,000 callable bond with a $5,000 discount is called at a price of 104 Discount on Bonds Payable Loss on Retirement of Bonds Cash Bonds Payable 200,000 bal 5,000 bal