72,800 gain should be recognised on this bond retirement
Solution:
Bond redemption applies to repurchases of newly sold debt by creditors. If the bonds have been issued, the borrower excludes the debt due in its accounts at the expected maturity of those instruments.
Paid at redemption : $1,000,000 * 102 = 1,020,000
Book value: $1,000,000 + $92,800 = 1,092,800
----------------------
Gain on bond retirement = 72,800
