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Answer:
$22,000 gain
Explanation:
Calculation for the gain or loss on this retirement
Using this formula
Carrying value of bonds = Par value + Unamortized premium - Retirement purchased price
Let plug in the formula
Carrying value of bonds =$1,000,000+(100%-40%*$20,000)-$990,000
Carrying value of bonds =$1,000,000+(60%*$20,000)-$990,000
Carrying value of bonds =$1,000,000+$12,000-$990,000
Carrying value of bonds =$22,000 gain
Therefore the gain on this retirement is:$22,000 gain