On January 1, 2015, Vaughn Manufacturing issued $17820000 of 10% ten-year bonds at 1 The bonds are callable at the option of Vaughn at 105. Vaughn has recorded amortization of the bond premium on the straight-line method (which was not materially different from the effective-interest method). On December 31, 2021, when the fair value of the bonds was 97, Vaughn repurchased $3960000 of the bonds in the open market at 97. Vaughn has recorded interest and amortization for 2021. Ignoring income taxes and assuming that the gain is material, Vaugh should report this reacquisition as a loss of $202440. a loss of $154440. a gain of $202440. a gain of $154440.

On January 1, 2015, Vaughn Manufacturing issued $17820000 of 10% ten-year bonds at 1 The bonds are callable at the option of Vaughn at 105. Vaughn has recorded amortization of the bond premium on the straight-line method (which was not materially different from the effective-interest method). On December 31, 2021, when the fair value of the bonds was 97, Vaughn repurchased $3960000 of the bonds in the open market at 97. Vaughn has recorded interest and amortization for 2021. Ignoring income taxes and assuming that the gain is material, Vaugh should report this reacquisition as a loss of $202440. a loss of $154440. a gain of $202440. a gain of $154440.

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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