Show the solution in good accounting form On June 30, 2002, Free Company had outstanding8%, P1,000,000 face amount, 15-year bondsmaturing on June 30, 2009. Interest is payable onJune 30 and December 31. The unamortizedbalance on June 30, 2002, in the bond discountand bond issue costs accounts were P35,000 andP10,000 respectively. Free acquired all of thesebonds at 94 on June 30, 2002, and retired them.ignoring income taxes, how much gain shouldFree report on this early extinguishment of debt?P15,000P25,000P35,000P60,000

Early extinguishment of debt incurs when the debt issuer recalls the securities prior to the…

Answered: 0,000 face amount, 15-year bonds on…

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 5E

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On June 31, 2016, Oriental Company had outstanding 8% P 1,000,000 face amount, 15-year bonds maturing on June 30, 2023. Interest is payable on June 30 and December 31. The unamortized balances on June 30, 2016, in the bond discount and deferred bond issue costs, were P35,000 and P 10,000, respectively. Oriental acquired all these bonds at 94 on June 30, 2016 and retired them. How much gain should Oriental report on this early extinguishment of debt? Answer this with solution pls

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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