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A Franchise wants to improve its Debt to Equity ratio, so it decides to retire a...

A Franchise wants to improve its Debt to Equity ratio, so it decides to retire a $24 million bond issue.  At the time of retirement, the market value of the bonds was $33 million and the carrying value of the bonds is $32 million.  Which of the following would be included in the journal entry to record the retirement of the bonds?

  • A debit of $1 million to a loss account.

  • A credit of $1 million to a gain account.

  • No gain or loss on retirement.

  • A credit to cash for $32 million.

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