8. A bond issued with a par value of $200,000 and a carrying amount of $195,500 is retired at 98.5. The gain or loss on this transaction is: dicont u Bond Payabl 200000 A) $3,000 loss. B) $3,000 gain. C) $1,500 loss. D) $1,500 gain. discout 4500 19991
8. A bond issued with a par value of $200,000 and a carrying amount of $195,500 is retired at 98.5. The gain or loss on this transaction is: dicont u Bond Payabl 200000 A) $3,000 loss. B) $3,000 gain. C) $1,500 loss. D) $1,500 gain. discout 4500 19991
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Debenture Valuation
A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.
Note Valuation
It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like:
Question
![8. A bond issued with a par value of $200,000 and a carrying amount of $195,500 is
retired at 98.5. The gain or loss on this transaction is:
discont
= 4500
Bond
Payabl
200000
A) $3,000 loss.
B) $3,000 gain.
C) $1,500 loss.
D) $1,500 gain.
discout
Debit
4500
199901.5](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F50fae6d0-f94e-45c9-a449-3aa8417f3829%2Fb02de0fc-f1ad-4b79-be68-73491f9a2efa%2Fnhihw6e_processed.jpeg&w=3840&q=75)
Transcribed Image Text:8. A bond issued with a par value of $200,000 and a carrying amount of $195,500 is
retired at 98.5. The gain or loss on this transaction is:
discont
= 4500
Bond
Payabl
200000
A) $3,000 loss.
B) $3,000 gain.
C) $1,500 loss.
D) $1,500 gain.
discout
Debit
4500
199901.5
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