On June 30, 2002, Free Company had outstanding 8%, P1,000,000 face amount, 15-year bonds maturing on June 30 , 2009. Interest is payable on June 30 and December 31. The unamortized balance on June 30, 2002, in the bond discount and bond issue costs accounts were P35,000 and P10,000 respectively. Free acquired all of these bonds at 94 on June 30, 2002, and retired them. Ignoring income taxes, how much gain should Free report on this early extinguishment of debt? P15,000 P25,000 P35,000 P60,000

On June 30, 2002, Free Company had outstanding 8%, P1,000,000 face amount, 15-year bonds maturing on June 30 , 2009. Interest is payable on June 30 and December 31. The unamortized balance on June 30, 2002, in the bond discount and bond issue costs accounts were P35,000 and P10,000 respectively. Free acquired all of these bonds at 94 on June 30, 2002, and retired them. Ignoring income taxes, how much gain should Free report on this early extinguishment of debt? P15,000 P25,000 P35,000 P60,000

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 5E

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Similar questions

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