I need help calculating the dollar amounts for #1 and #2. Thank you **Redemption of Bonds**McGee Company issued $200,000 face value bonds at a premium of $4,500. The bonds contain a call provision of 101. McGee decides to redeem the bonds due to a significant decline in interest rates. On that date, McGee had amortized only $1,000 of the premium.**Required:**1. Calculate the gain or loss on the early redemption of the bonds. - $ \_\_\_\_ $ Gain ✔️2. Calculate the gain or loss on the redemption assuming that the call provision is 103 instead of 101. - $ \_\_\_\_ $ Loss ✔️3. Select where the gain or loss should be presented on the financial statements. - Income Statement ✔️4. Why is the call price normally higher than 100? Bonds are redeemed early only if it is advantageous to the **issuing firm**. To compensate the **investors** for forgone interest, as well as for the costs and inconvenience involved, the call price is normally set at an amount higher than 100.---**Feedback**▽ **Check My Work**Carrying value is the face value of a bond adjusted for the amount of unamortized premium or discount. Calculate redemption amount. The gain or loss is the difference between the carrying value and redemption price. Consider the impact to the investor.

Company's that issue bonds or other securities may pay investors a redemption value when they buy…

McGee Company issued $200,000 face value bonds at a premium of $4,500. The bonds contain a call provision of 101. McGee decides to redeem the bonds due to a significant decline in interest rates. On that date, McGee had amortized only $1,000 of the premium. Required: 1. Calculate the gain or loss on the early redemption of the bonds. Gain v 2. Calculate the gain or loss on the redemption assuming that the call provision is 103 instead of 101. Loss v

McGee Company issued $200,000 face value bonds at a premium of $4,500. The bonds contain a call provision of 101. McGee decides to redeem the bonds due to a significant decline in interest rates. On that date, McGee had amortized only $1,000 of the premium. Required: 1. Calculate the gain or loss on the early redemption of the bonds. Gain v 2. Calculate the gain or loss on the redemption assuming that the call provision is 103 instead of 101. Loss v

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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