On July 1, 2018, Gumshoo called for redemption all of its P1,000,000 face amount of bonds payable outstanding at the call price of 105. As of June 30, 2018, the unamortized discount was P50,000 and the unamortized bond issue costs were P30,000. The market value of the bonds was P1,060,000 on July 1,2018, Gumshoo’s effective income tax rate was 40% for 2018. In its income statement for the year ended December 31, 2018, what amount should Gumshoo report as gain or loss from bond redemption? A. 78,000 loss B. 60,000 loss C. 30,000 gain D. 0
On July 1, 2018, Gumshoo called for redemption all of its P1,000,000 face amount of bonds payable outstanding at the call price of 105. As of June 30, 2018, the unamortized discount was P50,000 and the unamortized bond issue costs were P30,000. The market value of the bonds was P1,060,000 on July 1,2018, Gumshoo’s effective income tax rate was 40% for 2018. In its income statement for the year ended December 31, 2018, what amount should Gumshoo report as gain or loss from bond redemption? A. 78,000 loss B. 60,000 loss C. 30,000 gain D. 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On July 1, 2018, Gumshoo called for redemption all of its P1,000,000 face amount of bonds payable outstanding at the
call price of 105. As of June 30, 2018, the unamortized discount was P50,000 and the unamortized bond issue costs
were P30,000. The market
was 40% for 2018. In its income statement for the year ended December 31, 2018, what amount should Gumshoo
report as gain or loss from bond redemption?
A. 78,000 loss B. 60,000 loss C. 30,000 gain D. 0
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