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0,000 face amount, 15-year bonds on June 30, 2009. Interest is payab and December 31. The unamortized on June 30, 2002. in the bond disco

0,000 face amount, 15-year bonds on June 30, 2009. Interest is payab and December 31. The unamortized on June 30, 2002. in the bond disco

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On June 30, 2002, Free Company had outstanding 8%, P1,000,000 face amount, 15-year bonds maturing on June 30, 2009. Interest is payable on June 30 and December 31. The unamortized balance on June 30, 2002, in the bond discount and bond issue costs accounts were P35,000 and P10,000 respectively. Free acquired all of these bonds at 94 on June 30, 2002, and retired them. ignoring income taxes, how much gain should Free report on this early extinguishment of debt? P15,000 P25,000 P35,000 P60,000
Transcribed Image Text:On June 30, 2002, Free Company had outstanding 8%, P1,000,000 face amount, 15-year bonds maturing on June 30, 2009. Interest is payable on June 30 and December 31. The unamortized balance on June 30, 2002, in the bond discount and bond issue costs accounts were P35,000 and P10,000 respectively. Free acquired all of these bonds at 94 on June 30, 2002, and retired them. ignoring income taxes, how much gain should Free report on this early extinguishment of debt? P15,000 P25,000 P35,000 P60,000
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