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On 8/1/x5 Hoyle Company extinguished $100,000 par value of its bonds in the open market at 97. Hoyle's 10-year bonds were originally issued on 1/11x1
On 8/1/x5 Hoyle Company extinguished $100,000 par value of its bonds in the open market at 97. Hoyle's 10-year bonds were originally issued on 1/11x1 at 103, with 10% coupons payable 1,1 annually. Bond issue costs of $4,000 were incurred on the original sale (straight line amortization). Hoyle is a calendar year firm and has used the straight line method to amortize the original bond premium and bond issue costs. The gain/loss that should be recorded on the extinguishment is $2,458 gain $792 loss OSS $4,625 gain $2,558 gain
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