Answer:
loss of $667
Explanation:
The solution of gain or loss is shown below:-
Value of $10,000 bonds = Bonds outstanding ÷ Issued amount × Bonds
= $106,000 ÷ $100,000 × $10,000
= $10,600
Premium = $10,600 - $10,000
= $600
Carrying value =Value of bonds - Premium × 4 ÷ 36
= $10,600 - $600 × 4 ÷ 36
= $10,533
Gain/ Loss on retirement = Bonds × Retired percentage - Carrying value
= $10,000 × 112% - $10,533
= $667
So, there will be loss of $667
