A company has bonds outstanding with a face value of $100,000.The unamortized premium on these bonds is $2,700.If the company retired these bonds at a call price of 99.How much would be the gain or loss?
A)$2,700 Gain
B)$3,700 Gain
C)$3,700 Loss
D)$2,700 Loss

Question

Quizplus · Accepted Answer

The amount paid to retire the bonds is $100,000 F1F1F1S1F1F1F10 .99 = $99,000.The carrying value of the bonds at the date of retirement is $100,000 + $2,700 = $102,700.The gain on the retirement will be $102,700 - $99,000 = $3,700.

A Company Has Bonds Outstanding with a Face Value of $100,000.The