Problem 1: On July 1, 2014, Miniature Company has bonds with balances as shown below.
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Bonds Payable
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Premium on Bonds Payable
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65,000
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3,250
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If the company retires the bonds for $66,150, what will be the effect on the income statement?
- loss on retirement of $2,100
- loss on retirement of $4,400
- gain on retirement of $4,400
- gain on retirement of $2,100