A company has callable bonds outstanding with a par value of $100,000 The unamorticed discount on these bonds is $1,500. The company called to retire these bonde and paid a cal premsum (bonus)of $3,000 What is the gain or loss on this retirement?OA $3.000 kossOB 50 gain or lossOC. $4,500 lossOD. $1,500 gain

A bond is the debt instrument issued by a company to raise the fund for its operations. The company…

Answered: A company has callable bonds…

A company has callable bonds outstanding with a par value of $100,000 The unamont of $3,000 What is the gain or loss on this retirement? OA $3.000 koss OB 50 gain or loss C$4,500 loss

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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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

A company has callable bonds outstanding with a par value of $100,000 The unamorticed discount on these bonds is $1,500. The company called to retire these bonde and paid a cal premsum (bonus)
of $3,000 What is the gain or loss on this retirement?
OA $3.000 koss
OB 50 gain or loss
OC. $4,500 loss
OD. $1,500 gain

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