If a company calls bonds with a $1,000,000 maturity value for $1,020,000 when the book value is $950,000,a loss of $20,000 will be reported.

Name: If a company calls bonds with a $1,000,000 maturity value for $1,020,000 when the book value is $950,000,a loss of $20,000 will be reported.
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Quizplus · Accepted Answer

The loss will be reported as $70,000 because the difference between the call price ($1,020,000) and the book value ($950,000) is $70,000, not $20,000.

If a Company Calls Bonds with a $1,000,000 Maturity Value