On January 1, 2016, F Corp issued 2,000 of its 10 , $1,000 bonds for $2,080,000 These bonds were to mature on January 1, 2026, but were callable at 101 any time after December 31, 2019 Interest was payable semiannually on July 1 and January 1 On July 1, 2021, F called all of the bonds and retired them The bond premium was amortized on a straight line basis Assume that there was a bond issue cost of $100,000 and it was amortized on a straight line basis Before income taxes, F Corp 's gain or loss in 2021 on this early extinguishment of debt was A) $16,000 gain B) $29,000 loss C) $24,000 gain D) $101,000 loss

Question

On January 1, 2016, F Corp  issued 2,000 of its 10 , $1,000 bonds for $2,080,000  These bonds were to mature on January 1, 2026, but were callable at 101 any time after December 31, 2019  Interest was payable semiannually on July 1 and January 1  On July 1, 2021, F called all of the bonds and retired them  The bond premium was amortized on a straight line basis  Assume that there was a bond issue cost of $100,000 and it was amortized on a straight line basis  Before income taxes, F Corp 's gain or loss in 2021 on this early extinguishment of debt was  A) $16,000 gain  B) $29,000 loss C) $24,000 gain  D) $101,000 loss

Accepted Answer

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		A) $16,000 gain.
		B) $29,000 loss
		C) $24,000 gain.
		D) $101,000 loss.

Question

On January 1, 2016, F Corp. issued 2,000 of its 10%, $1,000 bonds for $2,080,000. These bonds were to mature on January 1, 2026, but

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