On July 31, 2010, Honedge Co. issued P1,000,000 of 10%, 15 year bonds at par and used a portion of the proceeds to call its 600 outstanding 11%, P1,000 face value bonds, due on July 31, 2010 at 102. On that date, unamortized bond premium relating to the 11% bonds was P65,000. In its 2010 income statement, what amount should Honedge report as gain or loss, before income taxes, from retirement of bonds? A. 77,000 loss B. 65,000 loss C. 53,000 gain D. 0
On July 31, 2010, Honedge Co. issued P1,000,000 of 10%, 15 year bonds at par and used a portion of the proceeds to call its 600 outstanding 11%, P1,000 face value bonds, due on July 31, 2010 at 102. On that date, unamortized bond premium relating to the 11% bonds was P65,000. In its 2010 income statement, what amount should Honedge report as gain or loss, before income taxes, from retirement of bonds? A. 77,000 loss B. 65,000 loss C. 53,000 gain D. 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On July 31, 2010, Honedge Co. issued P1,000,000 of 10%, 15 year bonds at par and used a portion of the proceeds to
call its 600 outstanding 11%, P1,000 face
premium relating to the 11% bonds was P65,000. In its 2010 income statement, what amount should Honedge report as
gain or loss, before income taxes, from retirement of bonds?
A. 77,000 loss B. 65,000 loss C. 53,000 gain D. 0
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