Bonds payable has a balance of $1,000,000, and discount on bonds payable has a balance of $12,500. if the issuing corporation redeems the bonds at 99, what is the amount of gain or loss on redemption?
The amount of loss on redemption is $2,500. Calculating the gain or loss in bond redemption is simply by If you take the redemption proceeds and subtract what you originally paid for the bond, then the difference will tell you the answer. If the answer is positive then it will be a gain and if it is negative then it is a loss. The answer in this question is $2,500 loss.
