Bryce has $1,500,000 of bonds outstanding. The unamortized premium is $21,600. If the company redeemed the bonds at 101, what would be the gain or loss on the redemption? O $6,600 gain O $15,000 loss O $15,000 gain O $6,600 loss

Bryce has $1,500,000 of bonds outstanding. The unamortized premium is $21,600. If the company redeemed the bonds at 101, what would be the gain or loss on the redemption? O $6,600 gain O $15,000 loss O $15,000 gain O $6,600 loss

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4EA: On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated...

See similar textbooks

Related questions

Q: The face value of Ace Hardware Company's outstanding bonds is $400,000 and unamortized premium is…

A: Unamortized premium pertains tp retirement of bonds = Total Unamortized premium x 50% = $20,000 x…

Q: Chang Industries has bonds outstanding with a par value of $200,000 and a carrying value of…

A: Calculation of gain or loss on retirement:

Q: 6 Landis Co. purchased P500,000 of 8%, 5-year bonds (DI@FVTOCI) from Ritter, Inc. on January 1,…

A: Solution:- Given, Landis Co. Purchased = P500,000 of 8%, 5 year bonds. Bonds sold = P520,790…

Q: The Viper retires a $497 millon bond issue when the carrying value of the bonds is $53.0 million,…

A: Gain(Loss) = Carrying value - Market value when retired = 53.0 million - 47.2 million = 5.8 million

Q: Bonds Payable has a balance of $900,000 and Premium on Bonds Payable has a balance of $10,000. If…

A: Redemption of Bonds: The process of repaying the sale amount of bonds to bondholders at the time of…

Q: Cramer Company sold 5-year, 8% bonds on October 1, 2011. The face amount of the bonds was $100,000,…

A: Interest expense = Interest accrued - Amortization of premium where, Accrued interest = Face value…

Q: Cone Company acquired long term 12% bonds, P2,000,000 face value for P2,192,000 including accrued…

A: Accrued interest from 1 Nov 2002 to January 1, 2003 = face value of the bonds xinterest arte x no.…

Q: Bonds Payable has a balance of $1,200,000 and Premium on Bonds Payable has a balance of $18,750. If…

Q: On June 31, 2016, Oriental Company had outstanding 8% P 1,000,000 face amount, 15-year bonds…

A: Bond can be defined as financial instruments which is a source of capital for the companies as well…

Q: On July 1, 2002, Roger Co. paid P1,198,00 10% 20-year bonds with a face amount of P1,000,000.…

A: Carrying amount refers to the asset original cost which is shown in the balance sheet of the company…

Q: On 1/1/X1, Kojak Corp. pays $45,000 to retire its bonds early. At the time of the retirement, the…

A: Gain (loss) on retirement = Carrying value of bonds - Amount paid

Q: On June 30, 2021, Omara Co. had outstanding 8%, P3,000,000 face amount, 15-year bonds maturing on…

A: Carrying Amount :— It refers to face value plus unamortized premiums less unamortized discount.…

Q: Lowe Company has $1620000 of bonds outstanding. The unamortized premium is $21700. If the company…

A: A bond is a fixed-income product that represents a borrower's debt from a lender (typically…

Q: ABC Company , a holder of P1,000,000 XYZ Company bonds, collected the interest due on March 31, year…

A: Non controlling interest = 25%

Q: On 1 January 2014, Company B purchased 100 5 year, R100 bonds from TP Limited at par. The bonds are…

A: Amortization of Bonds: When bonds are issued at a price which is either less or more than the face…

Q: Adam Corporation purchased 1,000 bonds of Quick Corporation in 2018 for $800 per bond and classified…

A: As per the accounting standard the securities are recorded in books two ways either as held to…

Q: 00 plus accrued interest. The bonds pay interest annually on January 1. on December 31, 2021, the…

A: When investments are accounted through fair value through profit or loss, the difference that arises…

Q: Jen Corporation retires its P 500,000 face value bonds at 105 on January 1, following the payment of…

A: Bonds when redeemed at more than the carrying value of the bonds they record loss .

Q: A company has bonds outstanding with a parvalue of $100,000. The unamortized premium on these bonds…

A: Unamortized premium on bonds is calculating by deducting the bond's price at actual face value at…

Q: On June 30, 2002, Baron had outstanding 8%, P1,000,000 face amount, 15-year bonds maturing on June…

A: Given information, Face value =P1,000,000 Bond discount=P35,000 Bond issue discount =P10,000

Q: On June 30, 2002, Free Company had outstanding 8%, P1,000,000 face amount, 15-year bonds maturing on…

A: Carrying Amount of Bond = Face value of Bond - (Unamortized Bond discount + Unamortized bond cost )…

Q: On 1 January 2014, Company B purchased 100 5 year, R100 bonds from TP Limited at par. The bonds are…

A: Calculation of Present value of life-time expected credit losses Expected loss on Future value =…

Q: On June 30, 2002, Baron had outstanding 8%, P1,000,000 face amount, 15-year bonds maturing on June…

A: Solution: Carrying value of bond on June 30, 2002 = P1,000,000 - P35,000 - P10,000 = P955,000

Q: On 1/1/2019, Allie Company issued bonds payable of $500,000 at 8%. It was sold at $464,000 with…

A: Bond amortization method is an accounting system, which systematically spread the bond discount or…

Q: On 1/1/2019, Allie Company issued bonds payable of $400,000 at 8%. It was sold at $364,000 with…

A: Bond amortization method is an accounting system to record the bond liabilities. It systematically…

Q: The face value of Ace Hardware Company's outstanding bonds is $400,000 and unamortized premium is…

A: Solution: Unamortized premium pertains tp retirement of bonds = Total Unamortized premium x 50% =…

Q: A company has bonds outstanding with a par value of $100.000. The unamortized discount on these…

A: SOLUTION- FORMULAS- 1- CARRYING VALUE = PAR VALUE - UNAMORTISED DISCOUNT . 2- GAIN OR (LOSS) =…

Q: How much is the gain/loss on the sale of the debt investment?

A: The difference between the carrying value of the investment in the books of entity and the price at…

Q: Clabber Company has bonds outstanding with a par value of $118.000 and a carrying value of $108,100.…

A: The bonds are issued at discount when market rate is lower than the coupon rate of interest.

Q: NYK, Inc.retires a $45 million bond issue when the carrying value of the bonds is $47 million, but…

A: When a company buys back bonds that it previously sold to investors, this is known as a bond…

Q: e entry to record the retirement will include:

A: When a company buys back bonds that it previously sold to investors, this is known as a bond…

Q: Company has bonds outstanding with a par value of $140,000. The unamortized premium on these bonds…

A: gain or (loss) on this retirement = Par Value - call price + unamortized premium

Q: On January 1, 20x1, ABC Co. issued new bonds with face amount of P10M for P10,800,000. ABC used the…

A: Bonds are a type of long-term debt generally issued by companies. The issuer of bonds pays interest…

Q: re on January 1, 2032, but were redeemable at 101 any time after December 31, 2025. Interest was…

A: A bond is a fixed-income security that reflects an investor's debt to a borrower.

Q: A company has bonds outstanding with a par value of $100,000. The unamortized discount on these…

A: Carrying value = Face value - Unamortized discount Carrying value = $100,000 - $4,800 Carrying value…

Q: On June 30, 2020, Kikiam Inc. had outstanding 8%, P3,000,000 face amount, 15-year bonds maturing on…

Q: On July 1, 2018, Miniature Company has bonds with balances as shown below. Bonds Payable…

A: Par value of Bonds payable: $65,000 Bonds with a par value of $65,000 are carrying a discount of…

Q: ement: Prepare Journal Entries on June 1 and selling of warrants.

A: Journal entry: Journal entry is the book of original entry where first transactions are recorded in…

Q: The following are two independent situations. 1. Sandhill Corporation redeemed $130,500 face…

A: Journal entry is a recording of a financial transaction of a business with debit and credit columns…

Q: On 1 January 2014, Company B purchased 100 5 year, R100 bonds from TP Limited at par. The bonds…

A: The effective interest rate should be recalculated in order to adjust the transaction costs It is…

Q: A company has callable bonds outstanding with a par value of $100,000 The unamont of $3,000 What is…

A: A bond is the debt instrument issued by a company to raise the fund for its operations. The company…

Q: On June 30, 2002, Free Company had outstanding 8%, P1,000,000 face amount, 15-year bonds maturing on…

A: Solution: Carrying value of bond on June 30,2002 = P1,000,000 - P35,000 - P10,000 = P955,000

Q: Blossom Company has $2080000 of bonds outstanding. The unamortized premium is $30000. If the company…

A: Gain on the redemption of Bond = Bonds Payable + Unamortized premium - Redemption cash value

Q: The 12% bonds payable of Lynn Co. had a carrying amount of $936,000 on December 31, 2004. The…

A: Amortization of premium on June 30, 2005 = Interest expense - Interest payment = $936000*12%*6/12 -…

Q: VICO Company had bonds payable with face amount of P5, 000, 000 and carrying amount of P4,800,000.…

A: Share premium is the amount over and above the par value received by the company. It is the…

Q: A company has bonds outstanding with a parvalue of $100.000. The unamortized premium on these bonds…

A: Par value of Outstanding Bonds= $100,000 Unamortized Premium= $3,500 Value of bonds on Retirement =…

Q: n July 1, 2021, Young Company purchased at fair value through profit or loss P500,000 face value 8%…

A: Explanation of Concept Bond is that debt instrument which is used by the organisation to finance…

Question

Bryce has $1,500,000 of bonds outstanding. The unamortized premium is $21,600. If the company
redeemed the bonds at 101, what would be the gain or loss on the redemption?
O $6,600 gain
O $15,000 loss
O $15,000 gain
O $6,600 loss
79°F Rain to

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Starmount Inc. sold bonds with a $50,000 face value, 12% interest, and 10-year term at $48,000. What is the total amount of interest expense over the life of the bonds?
Naval Inc. issued $200,000 face value bonds at a discount and received $190,000. At the end of 2018, the balance in the Discount on Bonds Payable account is $5,000. This years balance sheet will show a net liability of ________. A. $200,000 B. $180,000 C. $195,000 D. $205,000
Bats Corporation issued 800,000 of 12% face value bonds for 851,705.70. The bonds were dated and issued on April 1, 2019, are due March 31, 2023, and pay interest semiannually on September 30 and March 31. Bats sold the bonds to yield 10%. Required: 1. Prepare a bond interest expense and premium amortization schedule using the straight-line method. 2. Prepare a bond interest expense and premium amortization schedule using the effective interest method. 3. Prepare any adjusting entries for the end of the fiscal year, December 31, 2019, using the: a. straight-line method of amortization b. effective interest method of amortization 4. Assume the company retires the bonds on June 30, 2020, at 103 plus accrued interest. Prepare the journal entries to record the bond retirement using the: a. straight-line method of amortization b. effective interest method of amortization
Willoughby Inc. issued 100 bonds with a face value of $1,000 and a stated rate of 4% and received $105,000. What is the journal entry to record the sale of the bonds?
Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the market of interest was 9%. The company uses the effective-interest method of amortization. At the end of the year, the company will record ________. A. a credit to cash for $28,733 B. a debit to interest expense for $31,267 C. a debit to Discount on Bonds Payable for $1,267 D. a debit to Premium on Bonds Payable for $1.267
Allante Corporate issued 50 bonds with a face value of $1,000 and a stated rate of 4% and received $45,000. What is the journal entry to record the sale of the bonds?
Eli Inc. issued $100,000 of 8% annual, 5-year bonds for $103,000. What is the total amount of interest expense over the life of the bonds?
Waldron Inc. issued $400,000 bonds with a stated rate of 7% when the market rate was 5%. They are 3-year bonds with interest to be paid annually. Prepare a table to amortize the premium of the bonds. Assume that the bonds were issued for $421,844.
OShea Inc. issued bonds at a face value of $100,000, a rate of 6%, and a 5-year term for $98,000. From this information, we know that the market rate of interest was ________. A. more than 6% B. less than 6% C. equal to 6% D. cannot be determined from the information given.
Oak Branch Inc. issued $700,000 of 5%, 10-year bonds when the market rate was 4%. They received $757,243. Interest was paid semi-annually. Prepare an amortization table for the first three years of the bonds.
On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?