Question
Z company retires a $70 million bond issue when the carrying value of the bonds is $65 million, but the market value of the bonds
Z company retires a $70 million bond issue when the carrying value of the bonds is $65 million, but the market value of the bonds is $74 million. Z company will record the retirement as:
A) A debit of $9 million to Loss due to early extinguishment.
B) A credit of $9 million to Gain due to early extinguishment.
C) No gain or loss on retirement.
D) A debit to Cash for $74 million
Nelson Corporation issues 50,000 shares of $0.50 par value stock. The market price of the stock is $8 per share. Additional paid-in capital on this transaction would be:
A) debited for $400,000
B) credited for $375,000
C) debited for $375,000
D) credited for $25,000
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