On January 1, 2021, Mustas issued new bonds with face amount of P 10,000,000 for P 10,800,000. Mustas used the proceeds to retire an existing 10-year, 12% P 8,000,000 bonds issued five years earlier. The unamortized discount on the existing bonds is P 340,000. Mustas retired the bonds at a call premium of P 400,000. Mustas incurred P 50,000 direct costs of retirement. Compute for the gain or loss on retirement * a. P 690,000 gain b. P 790,000 loss c. P 690,000 loss d. P 790,000 gain
On January 1, 2021, Mustas issued new bonds with face amount of P 10,000,000 for P 10,800,000. Mustas used the proceeds to retire an existing 10-year, 12% P 8,000,000 bonds issued five years earlier. The unamortized discount on the existing bonds is P 340,000. Mustas retired the bonds at a call premium of P 400,000. Mustas incurred P 50,000 direct costs of retirement. Compute for the gain or loss on retirement * a. P 690,000 gain b. P 790,000 loss c. P 690,000 loss d. P 790,000 gain
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter8: Property Transactions: Capital Gains And Losses, Section 1231 And Recapture Provisions
Section: Chapter Questions
Problem 19P
Related questions
Question
On January 1, 2021, Mustas issued new bonds with face amount of P 10,000,000 for P 10,800,000. Mustas used the proceeds to retire an existing 10-year, 12% P 8,000,000 bonds issued five years earlier. The unamortized discount on the existing bonds is P 340,000. Mustas retired the bonds at a call premium of P 400,000. Mustas incurred P 50,000 direct costs of retirement. Compute for the gain or loss on retirement *
a. P 690,000 gain
b. P 790,000 loss
c. P 690,000 loss
d. P 790,000 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!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
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.Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning