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On January 2, 2006, a company sold a 20-year, 6% coupon bond issue with a face value of $10,000 for $8,459 (rounded to the nearest
On January 2, 2006, a company sold a 20-year, 6% coupon bond issue with a face value of $10,000 for $8,459 (rounded to the nearest whole dollar). The required coupon payments are made semi-annually on June 30th and December 31st of each year.
If the company redeems the issue of bonds payable for $9,266 in the market on January 2, 2021 (after the issue has been outstanding for 15 years), the gain or loss recognized on redemption amounts to: *
A) $204 Loss B) $807 Loss C) $925 Loss D) $118 Gain E) $603 Gain
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