Clabber Company has bonds outstanding with a par value of $107,000 and a carrying value of $101,500. If the company calls these bonds at a price of $98,500, the gain or loss on retirement is: Multiple Choice $8,500 loss. $5,500 loss. $3,000 gain. $3,000 loss. $5,500 gain.

Clabber Company has bonds outstanding with a par value of $107,000 and a carrying value of $101,500. If the company calls these bonds at a price of $98,500, the gain or loss on retirement is: Multiple Choice $8,500 loss. $5,500 loss. $3,000 gain. $3,000 loss. $5,500 gain.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 3PB: Starmount Inc. sold bonds with a $50,000 face value, 12% interest, and 10-year term at $48,000. What...

See similar textbooks

Related questions

Q: In order to determine whether or not a trial balance is complete, why is it not sufficient to verify…

A: Introduction:- The main purpose of a trial balance is to make sure that all entries made into…

Q: On August 4, Armstrong Trucking, Incorporated, paid $4,500 to replace the engine in one of its…

A: Any cost which improves the efficiency of the asset or increases the life of the asset should be…

Q: Mary-Ann is age 60 and plans to retire this year. She and her husband Wayne, age 66 have approached…

A: The RPP means the retirement pension plan that is created by the employer for its employees. This…

Q: Following is information on two alternative investment projects being considered by Tiger Company.…

A: INTRODUCTION Net Present value The Net Present value of the project is the total of the present…

Q: Under the equity method, the investor

A: Investment shows the amount provided in a project or securities with the expectation of something in…

Q: Required: 1. National Supply reacquired shares of Its common stock in two separate transactions and…

A: Shares refer to the unit issued by the company to raise funds from the market by making an agreement…

Q: Moonlight Sports Club has 100 members each of whom paid $170 for monthly subscriptions. On April 1,…

A: Since we are allowed to answer only first 3 sub-parts.I am answering only upto part c.Please…

Q: The firm's inventory policy is to have ending inventory equal to 10% of next month's sales. Fill in…

A: 1. Beginning inventory of february = Ending inventory of january i.e. 10% of sales of january…

Q: b) Production and sales data of Industrial Detergents Ltd are given below: Production (liters)…

A: Variable costing Vs. Absorption costing: Absorption costing includes all of the direct costs…

Q: Uses a standard cost system, manufactured 20,000 boat fenders during 2024. The 2024 revenue and cost…

A: Income statement is prepared by the business entities so as to know how much amount of gross profit…

Q: Aura Industries purchased land by paying $39,000 cash on the purchase date and agreeing to pay…

A: Answer to Question:- $207,802. Workings:- The liability to be reported on the balance sheet as of…

Q: Jack borrows $28,163 to pay for a car. The loan carries an annual rate of 5.7% and he wants to be…

A: ANSWER: Interest on loan = $6,021.6163328 (or) $6,022 EXPLANATION:- Present Value (PV) = $28,163…

Q: Lewis Enterprises is considering a project with an internal rate of return of 12%, an annual rate of…

A: Average investment = (Initial investment + Salvage value)/2 Annual rate of return = Annual net…

Q: A company has four types of products in its inventory. The company applies the rules under lower of…

A: Amount of inventory to be written off = (Cost - NRV)×quantity

Q: Sake has two classes of stock authorized: 8%, $10 par preferred, and $1 par value common. The…

A: The shareholder's equity section includes the capital that belongs to the shareholders. The dividend…

Q: 19. % BAD Company issues 9%, 10-year bonds with a face amount of $1,000,000 on January 1, 20A for…

A: Bonds payable are one of the sources of finance and are shown as liability. If the interest rate is…

Q: Pedro Company has $191,000 of machinery being depreciated over 5 years. There is no estimable…

A: Straight line depreciation is a common method of depreciation where the value of a fixed asset is…

Q: Ivanhoe Construction Company uses the percentage-of-completion method of accounting. In 2023,…

A: Revenue is recognized when the services or product to be given from seller is considered to be…

Q: nswer and explain thourougly For the following items, make a journal entry of the original…

A: 1. Paid $24,000 for a 1-year fire insurance policy to commence on September 1. on the date of the…

Q: Variable Costing Income Statement for a Service Company The actual and planned data for Broadwater…

A: Total revenue - Total variable Cost = Contribution margin

Q: Tharaldson Corporation makes a product with the following standard costs: Standard Quantity or Hours…

A: Direct labor rate variance is the difference between the standard rate and the actual rate,…

Q: Yarmouth Company produces a liquid solvent in two departments: Mixing and Finishing. Accounting…

A: The equivalent units are calculated on the basis of the percentage of the work completed during the…

Q: applies to the questions displayed below] Warnerwoods Company uses a perpetual inventory system. It…

A: Computation of cost assigned to ending inventory using FIFO : Perpetual FIFO: Goods Purchased…

Q: On January 5, Barnaby, Incorporated, purchased a patent costing $100,000 with a useful life of 20…

A: Adjusting journal entry: At year-end when the company finalizes its accounts then any unrecognized…

Q: Seth, Pete, Cara, and Jen form Kingfisher Corporation with the following consideration:…

A: Tax is needed to be paid on profit. Discount rate = 6% Marginal income tax rate = 35% Capital gains…

Q: Problem II A) Please use the Adjusted Trial Balance below to prepare the Multi-Step Income Statement…

A: Income statement shows the net income or net loss that is calculated by deducting the expenses from…

Q: Jumping Jumpers Smocking, Inc., is a monthly depositor whose December federal taxes are displayed…

A: Journal entry is the procedure for initially documenting commercial transactions in the books of…

Q: Assignment # 3 (From Cost Volume Profit Analysis Mauro Products has a single product, a woven…

Q: Johnson Enterprises uses a computer to handle its sales invoices. Lately, business has been so good…

A: Incremental Analysis: It is a technique of decision making used by the business to know to the…

Q: Michelle is an active participant in the rental condominium property she owns. During the year, the…

A: Introduction:- Michelle is an active participant in the rental condominium property she owns.…

Q: Green Golf Club Corp. had the following stockholders' equity at December 31, 2023: (Click the icon…

A: Answer : Stockholders' Equity Paid in capital Common stock $1 par value 650 shares…

Q: Sanchez placed $11114 into a five-year interest payout GIC at 4.2% compounded monthly. Calculate the…

A: P= $11114 Rate of Interest per month (r) = 4.2% / 12 months =0.32%

Q: Prepare the adjusting entry to record the lifetime expected credit losses for this customer on 31…

A: On 31 December 20X7: Since, The company expects to be able to collect $26,000 from the customer, the…

Q: Navarre Energy Research specializes in developing and commercializing new products. It is organized…

A: In corporate finance, Economic value added is a measurement of residual income/economic profit over…

Q: Required Information [The following information applies to the questions displayed below.] Jon-Jan…

A: The given question is asked to compute the value or amount which is recorded on November 1, 20x8.…

Q: QUESTION 28 At 12% annual interest, how long would it take to quintuple (five times) your…

A: In case of multiple questions, we are allowed to solve only the first question. If you want other…

Q: 2. One characteristic of partnership is a mutual agency, wherein the act of one is the act of the…

A: Answer:- Partnership meaning:- A partnership is a type of business where two or more people share…

Q: Patel and Sons Incorporated uses a standard cost system to apply factory overhead costs to units…

A: Standard time for producing one unit of output = 50,000 / 25,000 = 2 hours per unit of output…

Q: The management of Furrow Corporation is considering dro upcoming year appear below: Sales $970,000…

A: Financial advantage (disadvantage) is based on the current income and income after discontinuing the…

Q: Thoughtful Comfort Specialists, Inc. reported the following stockholders' equity on its balance…

A: Shareholder's equity or stock holder's section of the balance sheet shows the total amount which…

Q: In 2022, Nina contributes 13 percent of her $123,000 annual salary to her 401(k) account. She…

A: Amount contributed=Annual salary×Annual contribution percentage After-tax accumulation=Future value…

Q: Evaluating Investment Centers Terry Enterprises, Inc. has two divisions-the Foods division and the…

A: Return on Investment: Return on investment is a measure of the profitability of an investment. It…

Q: When bonds are retired at maturity, the entry to retire the bonds may include a gain or loss on…

A: Option 2 is the appropriate choice.

Q: questions: 1. Which company had the smallest revenue in 2015? 2. Approximate Wal-Mart's 2013…

A: 1. Dollar General has the smallest revenue in 2015. 2. Approximate revenue of Walmart 2013 revenue…

Q: Your company manufactures tables, normally 500 units per month you just got an order for 1,000 units…

A: Capacity means the highest number of units that can be produced by a company's production process.…

Q: The following information is available for ADT Company, which produces special-order security…

A: Direct labor is the labor or wages which are used or incurred in the manufacturing process and can…

Q: Identify which perspective(s) of the balanced scorecard each of the following critical success…

A: Balance Score Card The economic, consumer, internal business process, and performance outcomes…

Q: A business operated at 100% of capacity during its first month and incurred the following costs:…

A: Absorption costing: Absorption costing is also called traditional costing. This method of costing…

Q: I got to find if my general ledger is complete. So, In the general ledger, I add all the debits side…

A: The purpose of the trial balance is to prove that the ledger is in balance If the total balance for…

Q: Following are transactions for Vitalo Company. November 1 Accepted a $11,000, 180-day, 7% note from…

A: Notes Receivable - The note is an Instrument issued by the payer to the collector. It is a…

Question

Clabber Company has bonds outstanding with a par value of $107,000 and a carrying value of $101,500. If the company calls these bonds at a price of $98,500, the gain or loss on retirement is:

Multiple Choice

$8,500 loss.
$5,500 loss.
$3,000 gain.
$3,000 loss.
$5,500 gain.

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

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 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

Irving Inc. sold bonds with a $50,000, 10% interest, and 10-year term at $52,000. What is the total amount of interest expense over the life of the bonds?
Evie Inc. issued 50 bonds with a $1,000 face value, a five-year life, and a stated annual coupon of 6% for $980 each. What is the total amount of interest expense over the life of the bonds?
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.
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
Clabber Company has bonds outstanding with a par value of $119,000 and a carrying value of $108,700. If the company calls these bonds at a price of $104,500, the gain or loss on retirement is:
Chang Industries has bonds outstanding with a par value of $200,000 and a carrying value of $203,000. If the company calls these bonds at a price of $201,000, what is the gain or loss on retirement?
The face value of Ace Hardware Company's outstanding bonds is S400,000 and unamortized premium is $20,000. The company calls 50% of the outstanding bonds at a price of $205,000. What is the gain or loss on retirement of bonds?
A company has bonds outstanding with a par value of $100,000. The unamortized discount on these bonds is $4,800. The company calls these bonds at a price of $98,000 the gain or loss on retirement is:
The face value of Ace Hardware Company's outstanding bonds is $400,000 and unamortized premium is $20,000. The company calls 50% of the outstanding bonds at a price of $205,000. What is the gain or loss on retirement of bonds? a. $5,000 loss b. $25,000 gain c. $5,000 gain d. $25,000 loss
Company has bonds outstanding with a par value of $140,000. The unamortized premium on these bonds is $3,500. If the company retired these bonds at a call price of $137,200, the gain or loss on this retirement is: A. $2,800 gain B. $2,800 loss C. $6,300 gain D. $3,500 gain E. $3,500 loss
On January 1, 2020, LKI Company converted its 12%, P1,500,000 face value bonds payable with carrying amount of P1,552,049 for 20,000 ordinary shares with a par value of P50. The bonds were originally issued to yield 10%. The fair value of the bonds on the date of retirement is P1,600,000. Assuming that the bonds are convertible and the share premium from conversion option was P60,000. How much is the gain (loss) on conversion of the bonds to be recognized in the profit or loss during the period? (Round off present value factors up to four decimal places, in presenting your final answer round-up to the nearest peso)
A company has bond outstanding with a par value of 100,000. the unamortized discount on these bond is 4,900. the company call these bonds at a price of 99,000 the gain or loss on retirement is?