On January 1, 2020, Platz Inc. Issued $700,000 of 7 percent, five-year bonds payable at 108. Platz has extra cash and wishes to retire all of the bonds payable on January 1, 2021, immediately after making the second semi-annual interest payment. Platz uses the straight-line method of amortization. To retire
the bonds, Platz pays the market price of 97.
a. What is Platz's carrying amount of the bonds payable on the retirement date?
b. How much cash must Platz pay to retire the bonds payable?
c. Compute Plat's gain or loss on the retirement of the bonds payablo.