On January 1, 20x1, POTENT POWERFUL Co. issued 12% bonds with face amount of P4,000,000 for P4,303,264. The bonds mature in five years and pay annual interest every year-end. The effective interest rate is 10%. On July 1, 20x3, POTENT called-in the entire bonds and retired them at 102, which is inclusive of payment for accrued interest. How much is the gain (loss) on the extinguishment of the bonds? a. 328,897 c. (118,948) d. 118,948 b. (328,896)
On January 1, 20x1, POTENT POWERFUL Co. issued 12% bonds with face amount of P4,000,000 for P4,303,264. The bonds mature in five years and pay annual interest every year-end. The effective interest rate is 10%. On July 1, 20x3, POTENT called-in the entire bonds and retired them at 102, which is inclusive of payment for accrued interest. How much is the gain (loss) on the extinguishment of the bonds? a. 328,897 c. (118,948) d. 118,948 b. (328,896)
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
ChapterMB: Model-building Problems
Section: Chapter Questions
Problem 13M
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