© company?
ding
The face value of Ace Hardware
outstande bonds is $ 900,ooo and
un amortized premium de
is $ 20,000. The com
caly 50% of the outstanding bonds at la
price of 8 205,000. What is the gain ou los
retirement of bonds ?
8 5000 loss .
b s 25000 gain
8 Jooo
Jooo gain
d 8 25000 Play
Gius
Answers
Answer:
A company has bonds outstanding with a par value of $400,000. The unamortized premium on these bonds is $2,000. The company retired these bonds by buying them on the open market at 97. What is the gain or loss on this retirement? A. $0 gain or lossB. $10,000 gainC. $10,000 lossD. $14,000 gainE. $14,000 lossAnswer: DFeedback:Par value$400,000Unamortized premium2,000Carrying value of bonds$402,000Retirement price ($400,000 x .97)388,000Gain on retirement$ 14,000Bloom’s Taxonomy: AnalyzeAACSB: AnalyticAACSB: CommunicationAICPA BB: Critical ThinkingAICPA BB: IndustryAICPA FN: MeasurementAICPA FN: ReportingDifficulty: MediumLearning Objective: 10-P410-45
Answer:
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