?

Financial Accounting

Free Version

Upgrade subject to access all content

Moderate

Accounts Affected for Early Retirement of Bond

FINACT-5YCMFL

On July 1, 2015, BestCookie Co. has a balance in its bonds payable account of \$800,000 and in its premium on bonds payable account of \$50,000. The company retires the bond on July 1, 2015 by paying \$760,000 cash​.​

(1): What is the carrying amount of the bond when retiring the bond (in \$ amount)?

(2): What is the recognized gain when retiring the bond (in \$ amount)?