Answer: Gain or loss on this retirement = $3000(Gain)
Explanation:
Given that,
Outstanding Bonds with a par value = $100,000
Unamortized discount on these bonds = $5,000
So, bonds carrying a value = Outstanding Bonds with a par value - Unamortized discount
= 100000 - $5,000
= $95000
Company retired these bonds by buying them on the open market at 92 = 92% of 100000
= 92000
Therefore,
Gain or loss on this retirement = bonds carrying a value - Price paid at retirement
= 95000 - 92000
= $3000(Gain)
