Question
On January 1, 2013, F Corp. issued 3,200 of its 10%, $1,000 bonds for $3,298,000. These bonds were to mature on January 1, 2023 but
On January 1, 2013, F Corp. issued 3,200 of its 10%, $1,000 bonds for $3,298,000. These bonds were to mature on January 1, 2023 but were callable at 101 any time after December 31, 2016. Interest was payable semiannually on July 1 and January 1. On July 1, 2018, F called all of the bonds and retired them. The bond premium was amortized on a straight-line basis. Before income taxes, F Corp.'s gain or loss in 2018 on this early extinguishment of debt was:
Multiple Choice
$32,000 loss.
$81,000 gain.
$21,900 gain.
$12,100 gain.
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Financial Accounting with IFRS Fold Out Primer
Authors: John Wild
5th edition
978-0077408770, 77408772, 978-0077413804
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