Power 2020 Company issued $1,400,000 of 7%, 20-year bonds at 104 on January 1, 2002. Interest is payable semi-annually on July 1 and January 1. Through January 1, 2016, Power 2020 amortized $39,200 of the bond premium. On January 1, 2016, Power 2020 retires the bond at 101 (after making the interest payment on that date). Using the following table, indicate the effects on the company's financial statements of the bond retirement for January 1, 2016.
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$1,400,000 × 1.04 = $1,456,000 issue pr...View Answer
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