On December 31, 2014, Dadan Company had outstanding 12%, P5,000,000 face value bonds maturing on December 31, 2019. Interest was payable semiannually every June 30 and December 31. On December 31, 2014, after amortization was recorded for the period, the unamortized bond discount and bond issue cost were P500,000 and P300,000, respectively. On that date, Dadan acquired all its outstanding bonds on the open market at 98 and retired them. At December 31, 2014, what amount should Dadan recognize as pretax loss on early extinguishment of bonds? A. 700,000 B. 400,000 C. 200,000 D. 100,000
On December 31, 2014, Dadan Company had outstanding 12%, P5,000,000 face value bonds maturing on December 31, 2019. Interest was payable semiannually every June 30 and December 31. On December 31, 2014, after amortization was recorded for the period, the unamortized bond discount and bond issue cost were P500,000 and P300,000, respectively. On that date, Dadan acquired all its outstanding bonds on the open market at 98 and retired them. At December 31, 2014, what amount should Dadan recognize as pretax loss on early extinguishment of bonds? A. 700,000 B. 400,000 C. 200,000 D. 100,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On December 31, 2014, Dadan Company had outstanding 12%, P5,000,000 face
31, 2019. Interest was payable semiannually every June 30 and December 31. On December 31, 2014, after
amortization was recorded for the period, the unamortized bond discount and bond issue cost were P500,000 and
P300,000, respectively. On that date, Dadan acquired all its outstanding bonds on the open market at 98 and retired
them. At December 31, 2014, what amount should Dadan recognize as pretax loss on early extinguishment of bonds?
A. 700,000 B. 400,000 C. 200,000 D. 100,000
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