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

See similar textbooks

Related questions

Q: Current Attempt in Progress Pharoah Corporation had the following transactions pertaining to debt…

A: DateAccounts and Details Debit Credit 01/01/2022Investment in Bonds (or Debt Investments…

Q: PB3. LO 13.2 Starmount Inc. sold bonds with a $50,000 face value, 12% interest, and 10-year term at…

A: Given, Bond Face Value $ 50,000 Issue Proceeds $ 48,000 Discount on issue of Bond $…

Q: Enterprise Group issued $100,000 of 3-year, 6% bonds on December 31, 2025, for $106,000. Enterprise…

A: On May 1st, 10% of bonds retired. Book vale of theses 10% bonds = $10,533Par value of bonds (10% of…

Q: The following are two independent situations. 1 2 Sandhill Corporation redeemed $135,500 face value,…

A: Redemption is described as the repayment of any security issued or debt issued, or any bonds issued…

Q: Presented here is a partial amortization schedule for Bonita Company who sold $295000, five year 8%…

A: In this question we need to find the amount of premium amortized on 1 Jan 2021Given,unamortized…

Q: a) b) Prepare the journal entry to record the purchase of the bond assuming Graco Investor is…

A: Journal entries are recorded by using the principle of double-entry bookkeeping. Thus, it requires…

Q: Heller Company issues $760,000 of 10% bonds that pay interest semiannually and mature in 10 years,…

A: P0 = Price of the bond C = Semiannual coupon amount i.e. $38,000 ($760,000 * 0.10 / 2) r =…

Q: Lowe Company has $1620000 of bonds outstanding. The unamortized premium is $21700. If the company…

A: A bond is a fixed-income product that represents a borrower's debt from a lender (typically…

Q: The December 31, 2025 balance sheet of Cullumber Co. included the following items: 7.5% bonds…

A: Journal entries are made to record the transactions as the first process in the books of accounts…

Q: The mast recent thandal staiements for Crosby, Inc, tallow Interest expense wll remoin constant the…

A: Tax rate = 22%Dividend payout ratio = Dividend / Net income = 32,940 / 73,866 = 44.59%We will…

Q: Jordan Corporation issues 100, 5-year, 8%, $2,000 bonds dated January 1, 2022, at 96. To record the…

A: Bonds can be defined as a financial obligation taken out by the company from the investors. The…

Q: None

A: Step 1: Cash Received at the time of issue of bonds is equal to the sum of the quotation price plus…

Q: PB4. LO 13.2 Irving Inc. sold bonds with a $50,000, 10% interest, and 10-year term at $52,000. What…

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

Q: The bonds were issued on December 31, 2019, at 103, with interest payable on July 1 and December 31…

A: At first we need to compute the book value of retired bonds as of March 01, 2021. Book value is…

Q: bununo hank you in advance ! ABC Company purchased 50 Meissner AG 8%, 10-year, €1,000 bonds on…

A: Concept on Investment, Investment according to equity method Investment in Bond a debt instrument…

Q: On December 1, 2022 Big Inc. purchased 12% bonds of Small Inc. at their $30 million face value, as…

A: Face Value = $30 MillionCoupon Rate = 12%Date of Purchase of Bonds = December 1, 2022The income…

Q: A company issues $25450000, 7.8%, 20-year bonds to yield 8% on January 1, 2024. Interest is paid on…

A: The interest expense represents the actual interest expense on the bonds. The cash interest…

Q: On January 1, 2020, Hut Co. Itd sold sh.1, 000.000 of its 10% bonds for sh.885. 296 to yield 12%.…

A: Bond yield rate or the effective interest rate is the rate at which the present value of all the…

Q: 18. On January 1, 2020, Puckett Co. issued $50,000 of 8%, ten-year bonds at 98. Issuance costs…

A: In this question, loss on redemption shall be Loss on bond retainment =Redemption price of bond…

Q: A long-term investment in bonds with a cost of $80,000 was sold for $75,000 cash. What was the gain…

A: Gain or Loss on sale of investment can be the difference between the cost of investment and the…

Q: Company has bonds outstanding with a par value of $140,000. The unamortized premium on these bonds…

A: gain or (loss) on this retirement = Par Value - call price + unamortized premium

Q: At the end of 2025, Blossom Company purchased 6000, $1000, 10% bonds. The carrying value of the…

A: Face value of bonds (6,000 bonds * $1,000) $6,000,000 Less: Carrying value of bonds on December…

Q: e following information was taken from the 2024 financial statements of Novak Corporation: onds…

A: The cash flow statement is prepared to record the cash flow from various activities during the…

Q: Hemlock Company developed the followin

A: Direct Labor Cost: wages and payroll costs incurred in manufacturing activity. Examples are Wages…

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

Expert Solution

This question has been solved!

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

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

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

A company has bonds outstanding with a par value of $130,000. The unamortized premium on these bonds is $3,185. If the company retired these bonds at a call price of $128,700, the gain or loss on this retirement is: Multiple Choice O O $1,300 gain. $3,185 loss. $4,485 gain.
6
Please do not give solution in image format thanku
John Deere retires a $40 million bond issue when the carrying value of the bonds is $42 million, but the market value of the bonds is $36 million. The entry to record the retirement will include: A. A credit of $6 million to a gain account B. A debit of $6 million to a loss account C. A credit to cash for $42 million D. No gain or loss on retirement
Sh12
Blossom Company has $2080000 of bonds outstanding. The unamortized premium is $30000. If the company redeemed the bonds at 101, what would be the gain or loss on the redemption? $9200 gain $20800 loss $20800 gain $9200 loss
H
TI209 JADMANE BO Sources Trade and other payables Short-term borrowings Mortgage Long-term borrowings Share capital Retained earnings Amounts $200,000 250,000 500,000 250,000 300,000 800,000 The before-tax bank charges are 11.0% for the short-term borrowings, 10.0% for the long-term borrowings, and 10.5% on the mortgage. The shareholders expect to earn 16%. Assume that the company's income tax rate is 50%. 40% Questions financing 1. Calculate the company's after-tax cost of borrowing. 2. Calculate the company's weighted average cost of capital.
None
Miller Corporation has screenshot atttached thanks for the help gw35p kh35p