Question
1) On its December 31, 2017 balance sheet, Vaughn Manufacturing reported bonds payable of $6090000. The bonds had been issued at par. On January 2,
1) On its December 31, 2017 balance sheet, Vaughn Manufacturing reported bonds payable of $6090000. The bonds had been issued at par. On January 2, 2018, Vaughn retired $3045000 of the outstanding bonds at par plus a call premium of $70000. What amount should Vaughn report in its 2018 income statement as loss on extinguishment of debt (ignore taxes)?
| $35000 |
| $70000 |
| $0 |
| $30000 |
2) Bramble Corp. issues $31200000 of 10-year, 10% bonds on March 1, 2017 at 97 plus accrued interest. The bonds are dated January 1, 2017, and pay interest on June 30 and December 31. What is the total cash received on the issue date?
| $29884000 |
| $30264000 |
| $32084000 |
| $30784000 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started