$5,000,000 of five year, 6% bonds at par on January 1, 2012 with interest payable January 1 and July 1 each year. The bonds can be called at anytime at 101 plus accrued interest. On April 1, 2013, RRW bought back $1,000,000 of bonds on the open market for $984,736 including accrued interest and retired them. The gain or loss on retirement of these bonds on the retirement date would be: а. Gain of $15,264. b. Loss of $15,264. С. Gain of $25,264. d. Gain of $30,264. е. None of the above.
$5,000,000 of five year, 6% bonds at par on January 1, 2012 with interest payable January 1 and July 1 each year. The bonds can be called at anytime at 101 plus accrued interest. On April 1, 2013, RRW bought back $1,000,000 of bonds on the open market for $984,736 including accrued interest and retired them. The gain or loss on retirement of these bonds on the retirement date would be: а. Gain of $15,264. b. Loss of $15,264. С. Gain of $25,264. d. Gain of $30,264. е. None of the above.
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter14: Long-term Liabilities: Bonds And Notes
Section: Chapter Questions
Problem 8E
Related questions
Question
![Riviere-Rouge Wheels Inc. (RRW) sold
$5,000,000 of five year, 6% bonds at par on
January 1, 2012 with interest payable January
1 and July 1 each year. The bonds can be
called at anytime at 101 plus accrued interest.
On April 1, 2013, RRW bought back
$1,000,000 of bonds on the open market for
$984,736 including accrued interest and
retired them.
The gain or loss on retirement of these bonds
on the retirement date would be:
а.
Gain of $15,264.
b.
Loss of $15,264.
С.
Gain of $25,264.
d.
Gain of $30,264.
е.
None of the above.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F050cb2f7-bbda-48bc-8517-b57603125b60%2F004b6675-23b2-4f80-88aa-d450c7df8929%2Fyq6um_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Riviere-Rouge Wheels Inc. (RRW) sold
$5,000,000 of five year, 6% bonds at par on
January 1, 2012 with interest payable January
1 and July 1 each year. The bonds can be
called at anytime at 101 plus accrued interest.
On April 1, 2013, RRW bought back
$1,000,000 of bonds on the open market for
$984,736 including accrued interest and
retired them.
The gain or loss on retirement of these bonds
on the retirement date would be:
а.
Gain of $15,264.
b.
Loss of $15,264.
С.
Gain of $25,264.
d.
Gain of $30,264.
е.
None of the above.
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