Question
On January 1, 2015, Doty Co. redeemed its 15-year bonds of $5,000,000 par value for 102. They were originally issued on January 1, 2003 at
On January 1, 2015, Doty Co. redeemed its 15-year bonds of $5,000,000 par value for 102. They were originally issued on January 1, 2003 at 98 with a maturity date of January 1, 2018. The bond issue costs relating to this transaction were $300,000. Doty amortizes discounts, premiums, and bond issue costs using the straight-line method. What amount of loss should Doty recognize on the redemption of these bonds (ignore taxes)? Enter your response as an absolute number. answer is 180,000 but how? (5000000 x 1.02)-[4600000 x [(400000/150) x 12]] = 180000 where is that 150 coming from?
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