Bonds Payable has a balance of $1,010,000 and Discount on Bonds Payable has a balance of...

Question

Question

Bonds Payable has a balance of $1,010,000 and Discount on Bonds Payable has a balance of...

Bonds Payable has a balance of $1,010,000 and Discount on Bonds Payable has a balance of $12,120. If the issuing corporation redeems the bonds at 98, what is the amount of gain or loss on redemption?

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Face Value of Bonds = $1,010,000
Unamortized Discount on Bonds Payable = $12,120

Carrying Value of Bonds = Face Value of Bonds - Unamortized Discount on Bonds Payable
Carrying Value of Bonds = $1,010,000 - $12,120
Carrying Value of Bonds = $997,880

Cash Paid at Redemption = 98% * Face Value of Bonds
Cash Paid at Redemption = 98% * $1,010,000
Cash Paid at Redemption = $989,800

Gain on Redemption of Bonds = Carrying Value of Bonds - Cash Paid at Redemption
Gain on Redemption of Bonds = $997,880 - $989,800
Gain on Redemption of Bonds = $8,080

Add a comment

Answer 2

Similar Homework Help Questions

Bonds Payable has a balance of $1,010,000 and Discount on Bonds Payable has a balance of...

Bonds Payable has a balance of $1,010,000 and Discount on Bonds Payable has a balance of $12,120. If the issuing corporation redeems the bonds at 98, what is the amount of gain or loss on redemption?
Bonds Payable has a balance of $1,010,000 and Discount on Bonds Payable has a balance of...

Bonds Payable has a balance of $1,010,000 and Discount on Bonds Payable has a balance of $10,100. If the issuing corporation redeems the bonds at 97.5, what is the amount of gain or loss on redemption? a. $15,150 loss Ob. $10,100 gain c. $10,100 loss Od. $15,150 gain
Bonds Payable has a balance of $874,000 and Discount on Bonds Payable has a balance of...

Bonds Payable has a balance of $874,000 and Discount on Bonds Payable has a balance of $8,740. If the issuing corporation redeems the bonds at 97.5, what is the amount of gain or loss on redemption? Oa. $13,110 gain b. $13,110 loss Oc. C. $8,740 gain d. $8,740 loss

QUESTION 1 Bonds Payable has a balance of $1,000,000 and Discount on Bonds Payable has a...

QUESTION 1 Bonds Payable has a balance of $1,000,000 and Discount on Bonds Payable has a balance of $10,000. If the issuing corporation redeems t bonds at 97.5, what is the amount of gain or loss on redemption? a $25,000 loss b. $ 10,000 loss .$25,000 gain Od.$15,000 gain QUESTION 2 Basil Corporation issues for cash $1,000,000 of 8%, 10-year bonds, interest payable annually, at a time when the miarket rate ofinterest is 7% The straight-line method is adopted for...
Bonds Payable has a balance of $1,000,000 and Premium on Bonds Payable has a balance of $7,000. If the issuing corporati...

Bonds Payable has a balance of $1,000,000 and Premium on Bonds Payable has a balance of $7,000. If the issuing corporation redeems the bonds at 101, what is the amount of gain or loss on redemption? $7,000 gain $3,000 gain $3,000 loss $7,000 loss
1. On January 1, $808,000, five-year, 10% bonds, were issued for $783,760. Interest is paid semiannually...

1. On January 1, $808,000, five-year, 10% bonds, were issued for $783,760. Interest is paid semiannually on January 1 and July 1. If the issuing corporation uses the straight-line method to amortize the discount on bonds payable, the semiannual amortization amount is a.$40,400 b.$4,848 c.$24,240 d.$2,424 2. Bonds Payable has a balance of $991,000 and Premium on Bonds Payable has a balance of $10,901. If the issuing corporation redeems the bonds at 103, what is the amount of gain or...

On January 1, Elias Corporation issued 6% bonds with a face value of $94,000. The bonds...

On January 1, Elias Corporation issued 6% bonds with a face value of $94,000. The bonds are sold for $91,180. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, 10 years from now. Elias records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31 of the first year is a. $470 b. $2,820 c. $5,640 d. $5,922 Bonds Payable has a balance of $946,000...
Redemption of Bonds Payable A $850,000 bond issue on which there is an unamortized premium of...

Redemption of Bonds Payable A $850,000 bond issue on which there is an unamortized premium of $73,000 is redeemed for $821,000. Journalize the redemption of the bonds. If an amount box does not require an entry, leave it blank. Bonds Payable 850,000 850,000 Gain on Redemption of Bonds x 102,000 Premium on Bonds Payable x 73,000 Cash 821,000 Feedback Check My Work The gain or loss is the balancing amount needed to complete the entry and is the difference between...
1. Merchant Company issued 10-year bonds on January 1. The 7% bonds have a face value...

1. Merchant Company issued 10-year bonds on January 1. The 7% bonds have a face value of $709,000 and pay interest every January 1 and July 1. The bonds were sold for $589,257 based on the market interest rate of 8%. Merchant uses the effective interest method to amortize bond discounts and premiums. On July 1 of the first year, Merchant should record interest expense (round to the nearest dollar) of a.$23,570 b.$20,624 c.$28,360 d.$24,815 2. Franklin Corporation issues $94,000,...

D Question 4 3 pts Bonds payable has a balance of $40,000. Discount on Bonds payable...

D Question 4 3 pts Bonds payable has a balance of $40,000. Discount on Bonds payable has a balance of $1,200. What is the carrying amount of the bonds? $38,800 $40,000 $41,200

Bonds Payable has a balance of $1,010,000 and Discount on Bonds Payable has a balance of...

Homework Answers

Add Answer to:
Bonds Payable has a balance of $1,010,000 and Discount on Bonds Payable has a balance of...

Post as a guest

Earn Coins