3. The Cinci Company issues $100,000, 10% bonds at 105 on September 1, 2020. The bonds are dated January 1, 2020 and mature seven years from that date. Straight-line amortization is used. Interest is paid annually each December 31. Compute the bond carrying value as of December 31, 2025.

Answer $_______________

4. At December 31, 2020, the following balances existed for MICPA Corporation: Bonds Payable (6%) $600,000

Premium on Bonds Payable 50,000

The bonds mature on 12/31/27. Straight-line amortization is used.

If 60% of the bonds are retired at 104 on January 1, 2026, what is the gain or loss on early extinguishment?

Answer $_______________

4/15/2020

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