Question
The December 31, 2014, balance sheet of Hess Corporation includes the following items: 9% bonds payable due December 31, 2023: $3,000,000 Unamortized premium on bonds
The December 31, 2014, balance sheet of Hess Corporation includes the following items:
9% bonds payable due December 31, 2023: $3,000,000
Unamortized premium on bonds payable: 81,000
The bonds were issued on December 31, 2013, at 103, with interest payable on July 1 and December 31 of each year. Hess uses straight-line amortization. On March 1, 2015, Hess retired $1,200,000 of these bonds at 98 plus accrued interest. What should Hess record as a gain on retirement of these bonds? Ignore taxes. Please explain!
a. $56,400.
b. $32,400.
c. $55,800.
d. $60,000.
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