Answered: A company has bonds outstanding with a…

A company has bonds outstanding with a parvalue of $100,000. The unamortized premium on these bonds is $3,500. The company calls these bonds at a price of $102,000, :the gain or loss on retirement is

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: The face value of Ace Hardware Company's outstanding bonds is $400,000 and unamortized premium is…

A: Unamortized premium pertains tp retirement of bonds = Total Unamortized premium x 50% = $20,000 x…

Q: Health First Ltd. retires its 8% bonds for $74,000 before its maturity date. Carrying value at the…

A: b. Bonds Payable $78,693 Gain on Bonds Retirement 4,693 Cash 74,000To record the retirement…

Q: On February 1, 2023, Pat Weaver Incorporated issued 10%, $1,000,000 bonds for $1,300,000. retired…

A: The bonds payable are the financial instruments for the business. The bonds are issued to raise…

Q: Chang Industries has bonds outstanding with a par value of $200,000 and a carrying value of…

A: Calculation of gain or loss on retirement:

Q: On January 1, 20X1, Palko Corp. issued ten (10) year bonds with a face value of $600,000 and a…

A: Price of bond is the present value of coupon payments plus present value of the par value of the…

Q: On January 1, 2022, Bramble and Lois Company purchased 12% bonds having a maturity value of $234,000…

A: The bonds are issued or purchased either at discount or at a premium. The bond amortization table is…

Q: On January 1, 2020, Naples Co. issued $280,000 of 10-year bonds at 96. The bonds pay 6% cash…

A: Total discount on bonds retired on June 1, 2020 = Total amount of bonds issued x % of bonds retired…

Q: a. Jason Allen Co. sold $2,080,000 of 12%, 10-year bonds at 102 on January 1, 2025. The bonds were…

A: Bonds refer to the debt instruments issued either by the government or corporations. The bonds are…

Q: Bonds Payable has a balance of $952,000 and Premium on Bonds Payable has a balance of $10,472. If…

A: Redemption value of Bonds = $952,000 * 102% Redemption value of Bonds = $971,040 Premium on Bonds…

Q: A $276,000 bond was redeemed at 98 when the carrying amount of the bond was $271,860. What amount of…

A: When a bond is redeemed, the difference between carrying value and redemption value.

Q: On January 1, 2021, Tiny Tim Industries had outstanding $1,000,000 of 8% bonds with a book value of…

A: A bond is the long-term debt of an entity. The bonds are paid in more than one year. The bonds…

Q: Bonds Payable has a balance of $900,000 and Premium on Bonds Payable has a balance of $10,000. If…

A: Redemption of Bonds: The process of repaying the sale amount of bonds to bondholders at the time of…

Q: A company sold bonds on January 1, 2021, for $207,913. This price represents a market rate of 9% on…

A: Bonds sold at premium: When the bonds are sold at a price more than its face value then the excess…

Q: Oriole Company issued $760,000, 7%, 10-year bonds on January 1, 2022, for $815,933. This price…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: Stellar Co. sold $1,950,000 of 12%, 10-year bonds at 106 on January 1, 2020. The bonds were dated…

A: When bonds are issued at a price more than face value, then it means they are issued at a premium.…

Q: Clabber Company has bonds outstanding with a par value of $119,000 and a carrying value of $108,700.…

A: Formula: Gain or loss on retirement = carrying value of bonds - bonds call price

Q: Bonds Payable has a balance of $802,000 and Discount on Bonds Payable has a balance of $9,624. If…

A: The objective of this question is to calculate the gain or loss on redemption of bonds. The company…

Q: A company has $200,000 of 10-year bonds payable outstanding. These bonds had a discount of $24,000…

A: Bonds: It is a debt instrument issued by the government or the organisation to the holders.

Q: On 1/1/X1, Kojak Corp. pays $45,000 to retire its bonds early. At the time of the retirement, the…

A: Gain (loss) on retirement = Carrying value of bonds - Amount paid

Q: Vaughn Company received proceeds of $206800 on 10-year, 6% bonds issued on January 1, 2020. The…

A: Bonds are the debt obligations of a business on which it requires to pay regular interest to the…

Q: The face value of Ace Hardware Company's outstanding bonds is $400,000 and unamortized premium is…

A: Face value of bond is $400,000, Hence 50% of these bonds will be valued at $200,000. These bonds…

Q: Premium Pizza retires its 7% bonds for $72,000 before their scheduled maturity. At the time, the…

A: Early retirement of bonds: it is the process of repaying the principal amount of bonds to…

Q: On June 30, 2021, Omara Co. had outstanding 8%, P3,000,000 face amount, 15-year bonds maturing on…

A: Carrying Amount :— It refers to face value plus unamortized premiums less unamortized discount.…

Q: On January 1, 2022, Tony Orlando Industries had outstanding $1,000,000 of 12% bonds with a book…

A: Bonds refer to the instrument considered as fixed income that is representing the loan to a borrower…

Q: 2. On January 1, 2020, High Shots issued $250,000 of 11% ten-year bonds at 104. Bond premium is…

A: Bond retirement means paying off bond payable liability and writing off the bond liability from the…

Q: On February 1, 2020, Pat Weaver Inc. (PWI) issued 11%, $1,800,000 bonds for $2,100,000. PWI retired…

A: Bond retirement refers to the repurchase of initially issued bonds from investors. When the bonds…

Q: a. Matthew Young Co. sold $1,890,000 of 12%, 10-year bonds at 105 on January 1, 2025. The bonds were…

A: Since you have posted multiple questions, we can only provide the solution to the first question…

Q: On its December 31, 2024 balance sheet, Sunland Corp. reported bonds payable of $6090000. The bonds…

A: The company's capital can be increased by issuing shares, bonds, debentures, etc., These are called…

Q: A company retired $60 million of its 6% bonds at 102 ($61.2 million) before their scheduled…

Q: On February 1, 2020, Pat Weaver Inc. (PWI) issued 11%, $1,100,000 bonds for $1,400,000. PWI retired…

A: The bonds payable are the financial instruments for the business. The bonds are issued to raise…

Q: Clabber Company has bonds outstanding with a par value of $107,000 and a carrying value of $101,500.…

A: Bonds :Bonds is a long-term debts issued by the government and companies to raise funds for their…

Q: Bryce has $1,500,000 of bonds outstanding. The unamortized premium is $21,600. If the company…

A: Total redemption value = Face value of bonds x redemption price/100 = $1500000 x 101/100 =…

Q: Sheridan Corporation issued $460,000, 9%, 20-year bonds on January 1, 2020, for $420,837. This price…

A: Journal Entry: It is a systematic record of a financial transaction recorded in chronological order.

Q: A company issued a 3,000,000 6-year bonds dated January 1,2021, with a stated interest rate of 11%.…

A: The bond valuation refers to determining the bond's current price, Yield To Maturity, Current yield,…

Q: Jim Company issued P 4,000,000 of 8 ½%, 5- year bonds on March 1,2018. Interest payment dates are…

A: Since we answer only up to three sub-parts, we shall answer the first three. Please resubmit a new…

Q: On February 1, 2023, Pat Weaver Incorporated (PWI) issued 12%, $1,700, 000 bonds for $2,000,000. PWI…

A: The bonds payable are the financial instruments for the business. The bonds are issued to raise…

Q: On January 1, 2025, Blossom Company purchased 5% bonds, having a maturity value of $400,000 for…

A: An investor invests in bonds to earn regular interest payments over the period of bond life. At the…

Q: Vicki Company issued $1 million face amount of 8.50%, 20-year bonds on April 1, 2022. The bonds pay…

A: Bonds payable refers to a type of long-term debt that a company or organization issues to borrow…

Q: Sheridan Industries, Inc. issued $17,400,000 of 8% debertures on May 1, 2024 and received cash…

A: The objective of the question is to calculate the total dollar amount of discount or premium…

Q: A company retired $68 million of its 5% bonds at 105 ($71.4 million) before their scheduled…

A: The redemption of bonds payable refers to the repurchase of bonds by the issuer company. This mainly…

Q: 5. On January 1, 2024, Hart Co. redeemed (retired) its 15-year bonds of $500,000 par value for 102.…

A: Bonds payable refers to a type of long-term debt that a company or organization issues to borrow…

Q: Josselle Corporation retires its bonds at 106 on January 1, after the payment of interest.The face…

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: Discount Pizza retires its 7% bonds for $68,000 before their scheduled maturity. At the time, the…

A: Given information is: Discount Pizza retires its 7% bonds for $68,000 before their scheduled…

Q: 27. A company holds $150,000 par value of bonds with a carrying value of $147,950. The company calls…

A: Bonds are high-security instruments for debt that help organizations raise money and meet their…

Q: On January 1, 2022, Bramble and Lois Company purchased 12% bonds having a maturity value of $234,000…

A: The bonds are issued or purchased either at discount or at a premium. The bond amortization table is…

Question

100%

A company has bonds outstanding with a parvalue of $100,000. The unamortized premium on these bonds is $3,500. The company calls these bonds at a price of $102,000,
:the gain or loss on retirement is
loss $3,500 AO
-gain $1,500 B O
-gain $3,500.CO
loss $1,500.DO

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Crane Company redeemed $178,000 face value, 17.5% bonds on June 30, 2022, at 98. The carrying value of the bonds at the redemption date was $190,000. The bonds pay annual interest, and the interest payment due on June 30, 2022, has been made and recorded. Prepare the appropriate journal entry for the redemption of the bonds.
Clabber Company has bonds outstanding with a par value of $118,000 and a carrying value of $108,100. If the company calls these bonds at a price of $104,000, the gain or loss on retirement is: Multiple Choice $9,900 gain. $9,900 loss. $4,100 gain. $14,000 loss. $4.100 loss.
A company has bonds outstanding with a par value of $100,000. The unamortized discount on these bonds is $4,800. The company calls these bonds at a price of $98,000 the gain or loss on retirement is:
NYK, Inc.retires a $45 million bond issue when the carrying value of the bonds is $47 million, but the market value of the bonds is $45 million. The entry to record the retirement will include: Select one: a. A credit of $4 million to Gain on Bond Retirement. b. A debit of $4 million to Loss on Bond Retirement. c. No gain or loss on retirement d. A debit of $2 million to Loss on Bond Retirement e. A credit of $2 million to Gain on Bond Retirement.
NYK, Inc.retires a $45 million bond issue when the carrying value of the bonds is $43 million, but the market value of the bonds is $46 million. The entry to record the retirement will include: Select one: a. A debit of $3 million to Loss on Bond Retirement. b. A credit of $1 million to Gain on Bond Retirement. c. A debit of $1 million to Loss on Bond Retirement d. No gain or loss on retirement e. A credit of $2 million to Gain on Bond Retirement.
18. On January 1, 2020, Puckett Co. issued $50,000 of 8%, ten-year bonds at 98. Issuance costs amounted to $2,000. On July 1, 2025, one half of the bonds were called at 103. What was the loss on bond retirement, assuming the use of straight-line amortization? a. $1,425b. $ 975c. $2,425d. $2,250
Company has bonds outstanding with a par value of $140,000. The unamortized premium on these bonds is $3,500. If the company retired these bonds at a call price of $137,200, the gain or loss on this retirement is: A. $2,800 gain B. $2,800 loss C. $6,300 gain D. $3,500 gain E. $3,500 loss
On January 1, 2022, Gorski Corp. purchased $1,000,000, 10% bonds for $1,040,000. These bonds were to mature on January 1, 2032, but were redeemable at 101 any time after December 31, 2025. Interest was payable semiannually on July 1 and January 1. On July 1, 2027, Gorski sold all of the bonds. Bond premium was amortized on a straight-line basis. Gorski’s gain or loss in 2027 was: Select one: a. $30,000 loss b. $12,000 loss c. $10,000 gain d. $8,000 loss e. $12,000 gain
The face value of Ace Hardware Company's outstanding bonds is $400,000 and unamortized premium is $20,000. The company calls 50% of the outstanding bonds at a price of $205,000. What is the gain or loss on retirement of bonds? a. $5,000 loss b. $25,000 gain c. $5,000 gain d. $25,000 loss
A company has bonds outstanding with a par value of $100,000. The unamortized discount on these bonds is $4,800. The company calls these bonds a a price of $98,000 the gain or loss on retirement is: Multiple Choice $0 gain or loss. $2,800 gain. $2,800 loss.
On July 1, 2018, Miniature Company has bonds with balances as shown below. Bonds Payable 65,000 Discount Payable on Bonds 3,250 If the company retires the bonds for $66,150, what will be gain or loss on the retirement?
Bonds Payable has a balance of $1,091,000 and Discount on Bonds Payable has a balance of $13,092. If the issuing corporation redeems the bonds at 98, what is the amount of gain or loss on redemption?