Question
On January 1, 2020, Coleman Corporation issued five-year, 12% bonds payable with a face value of $2,800,000. The bonds were issued at 91 and pay
On January 1,
2020,
Coleman
Corporation issued
five-year,
12%
bonds payable with a face value of
$2,800,000.
The bonds were issued at
91
and pay interest on January 1 and July 1.
Coleman
amortizes bond discounts using the straight-line method. On December 31,
2022,
Coleman
retired the bonds early by purchasing them at a market price of
94.
The company's fiscal year ends on December 31.
a) Calculate the carrying value of the bonds payable on December 31, 2022, prior to their retirement. b) Calculate the gain or loss on the retirement of the bonds payable on December 31, 2022. Indicate where this gain or loss will appear in the financial statements. |
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