A bond is issued at a price of 103 and retired early at aprice of 97. Which of the following is true?a. A gain will be reported on the income statement whenthe bond is issued.b. A loss will be reported on the income statement whenthe bond is issued.c. A gain will be reported on the income statement whenthe bond is retired.d. A loss will be reported on the income statement whenthe bond is retired.

Question

A bond is issued at a price of 103 and retired early at a
price of 97. Which of the following is true?
a. A gain will be reported on the income statement when
the bond is issued.
b. A loss will be reported on the income statement when
the bond is issued.
c. A gain will be reported on the income statement when
the bond is retired.
d. A loss will be reported on the income statement when
the bond is retired.

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Accounting

Bond/Notes Valuation

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: Classify the following adjusting entries as involving prepaid expenses (PE), unearned revenues (UR),...

A: Accrued expenses are those expenses which are due for the period but not paid in the same financial ...

Q: The fraud triangle asserts that the following three factors must exist for a person to commit fraud....

A: Given situation is: A worker sees other employees regularly take inventory for personal use.

Q: Please answer the Serial questions in the attached files.  Here's the Trial Balance information from...

A: Since there are multiple sub parts in the question, Calculation will be given for first three sub pa...

Q: Masterson Supply purchased a small storage building for $20,000 to be used over a five-year period. ...

A: Given information is: Masterson Supply purchased a small storage building for $20,000 to be used ove...

Q: Identify which of the following accounts would be included in a post-closing trial balance. Land

A: Post closing trial balance is the summary of ledger accounts balances after all the adjustments. It ...

Q: Jenny has learned that assets have debit balances, while liabilities have credit balances. Based on ...

A: Given situation is: Jenny has learned that assets have debit balances, while liabilities have credit...

Q: Explain why ratios that compare an income statement account with a balance sheet account should expr...

A: Click to see the answer

Q: (Analysis of Given Ratios) Picasso Company is a wholesale distributor of packaging equipment and sup...

A:  

Q: What information would you expect to find in a current audit file?

A: Audit: Audit is the process of verification of the compliance of the financial statements.

Q: Match the ratio to the building block of financial statement analysis to which it best relates.A. Li...

A: Times interest earned ratio is used to measure ability of the company to pay it's debt payment.  Tim...

Q: As of December 31, 2019, Armani Company’s financial records show the following items and amounts.Cas...

A: Net Income = Revenues - expenses

Q: Identify which of the following items are not included as part of general-purpose financial statemen...

A: Click to see the answer

Q: AXE Co. is the defendant in a lawsuit. AXE reasonably estimates that this pending lawsuit will resul...

A: In order to record a contingent liability as a liability it must be ensured that outflow of resource...

Q: On January 1, 2019, when its $30 par value common stock was selling for $80 per share, Ivanhoe Corp....

A: Convertible Debentures: A debenture holder is a creditor of the company.Any debenture is a long term...

Q: what is the journal entries and ledgers for this sources ?

A: The journal entries are the financial records of the business transactions.

Q: After fieldwork audit procedures are completed, a partner of the CPA firm who has not been involved ...

A: As per Standard of Auditing the main focuses of Second Review is Confirmation of Financial Statemen...

Q: Why is it a good idea to create a “Budgeting Assumptions” tab when creating a master budget inMicros...

A: Master budget: Master budget is an interrelated budget that collectively summarizes all the planned...

Q: On February 19 of the current year, Quartzite Co. pays $5,400,000 for land estimated to contain 4 mi...

A: Since there are multiple sub parts in the question, answer will be given for first three sub parts o...

Q: Q.2 Alexander Company purchased a piece of equipment for $12,000 and depreciated it for three years ...

A: Depreciation is reduction in the value of assets over the time due to normal wear and tear. There ar...

Q: Which of the following statements is not true with respect to nonstatistical sampling?a. It cannot b...

A: Non statistical sampling method is a method which is based on the judgement of individuals. Any form...

Q: Stephanie's Bridal Shoppe sells wedding dresses. The average selling Price of each dress is $1,000, ...

A: Break even point (BEP): Breakeven is the point where total expenses are equal to total revenue. at t...

Q: For each of the following independent situations, prepare journal entries to record the initial tran...

A: a. Hockey Helpers paid $4,000 cash on September 30 to rent an arena for the months of October and No...

Q: Sweet Catering completed the following selected transactions during May 2016: May 1: Prepaid r...

A: Cash Method: The cash method is an accounting system that records revenue when actual cash is receiv...

Q: Th e collection of all business transactions sorted by account in an accounting system is referred t...

A: Financial Accounting Financial accounting is that branch of accounting which is associated with ide...

Q: On January 15, the end of the first pay period of the year, North Company’s employees earned $35,000...

A: Click to see the answer

Q: Costs of $5,000 were incurred to acquire goods and make them ready for sale. The goods were shipped ...

A: Buyer’s total cost of merchandise inventory = Cost of goods purchased + Freight in + Additional nece...

Q: Indicate whether each statement best describes the allowance (A) method or the direct write-off (DW)...

A: Under the direct write off method the bad debts is treated as charged to expenses when it is clear t...

Q: Garcia Company issues 10%, 15-year bonds with a par value of $240,000 and semiannual interest paymen...

A: Amortization of bond discounts using Effective Method:   The issuance of bond at a price lower than...

Q: On January 2, 2011, Jansing Corporation acquired a new machine with an estimated useful life of five...

A: Depreciation is the accounting process of converting the original costs of fixed assets such as plan...

Q: An assurance service is defined as a service thata. Provides auditing services to nonfinancial infor...

A: Assurance service: It is aimed at improving the quality of information for the individual making dec...

Q: Placid Lake Corporation acquired 90 percent of the outstanding voting stock of Scenic, Inc., on Janu...

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and s...

Q: Prepare Krum Co.’s journal entries to record the following transactions involving its short-term inv...

A: Journal: Recording of a business transactions in a chronological order.

Q: (Learning Objective 3: Compute and record depreciation after a change in usefullife of the asset) Fu...

A: Given information is: Cost of concession stand = $500,000 Useful life = 25 years  

Q: Units-of-activity Depreciation A truck acquired at a cost of $235,000 has an estimated residual valu...

A: Units-of-activity method: Under the activity method, the depreciation expense is calculated on the b...

Q: The balance sheets for Sports Unlimited for 2021 and 2020 are provided below.SPORTS UNLIMITED Balanc...

A:  The vertical analysis is as follows: The result will be:

Q: Kasey Hartman is the controller for Wholemart Company, which has numerous long-term investments in d...

A: The securities that are termed as held-to-maturity are purchased with an aim to keep them till their...

Q: Income statement and balance sheet data for Virtual Gaming Systems are provided below.Required: 1. C...

A: Risk ratios are calculated based on the company's ability to pay back the current and long -term lia...

Q: Shaquille Corporation has operating income of $1.7 million, a loss on write-down of inventory of $20...

A: Given information is: Shaquille Corporation has operating income of $1.7 million, a loss on write-do...

Q: Identify each of the following terms or phrases as an accounting (a) principle, (b) assumption, or(c...

A: Accounting principles are those rules and regulations which helps in accounting. 

Q: Sports Emporium has two operating segments: sporting goods and sports apparel. The income statement ...

A: Vertical analysis percentage = ( Individual line item / Base amount ) x 100.

Q: Red Rock Bakery purchases land, building, and equipment for a single purchase price of $600,000. How...

A: Fair value: Fair value is the price at which, both seller and buyer agree to exchange the asset. So,...