On December 1, 2011, Cone Company issued its 10%, $470,000 face value bonds for $550,000, plus accrued interest. Interest is payable on November 1 and
On December 1, 2011, Cone Company issued its 10%, $470,000 face value bonds for $550,000, plus accrued interest. Interest is payable on November 1 and May 1. On December 31, 2013, the book value of the bonds, inclusive of the unamortized premium, was $500,000 . On July 1, 2014, Cone reacquired the bonds at 97 plus accrued interest. Cone appropriately uses the straight-line method for the amortization because the results do not materially differ from those of the effective interest method.
Prepare a schedule to compute the gain or loss on this redemption of debt. Enter all values as positive values.
| Book value of bonds on December 1, 2011 | | | |
| Book value of bonds on December 31, 2013 | | | |
| Amortization for 25 months | | | |
| | | |
| Book value of bonds on December 31, 2013 | | | |
| Amortization for 2014 to July 1, 2014 | | | |
| Book value of bonds on July 1, 2014 | | | |
| | | |
| Gain on extinguishment of debt | | | |
