Q11

On December 31st, 2015, one year before maturity, Romo Company retired $300,000 (face value) of its 8% coupon rate notes payable. To retire the notes, Romo paid 102% of par. The notes' book value (i.e. amount shown on the balance sheet) on December 31st, 2015, immediately before their retirement was $296,100. What gain or loss will Romo report on the retirement of these bonds? 1) $9,900 gain. 2) $9,900 loss. 3) $3,900 loss. 4) $3,900 gain. 5) None of these answers is correct