A company has bonds outstanding with a par value of $400,000. The unamortized premium on these bonds

Question:

A company has bonds outstanding with a of $400,000. The unamortized premium on these bonds is $2,000. The company retired these bonds by buying them on the open market at 97. What is the gain or loss on this retirement?
a. $14,000 loss
b. $14,000 gain
c. $10,000 gain
d. $0 gain or loss
e. $10,000 loss
Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...