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On June 30, 2002, LOAD 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. LOAD acquired all of these bonds at 94 on June 30, 2002, and retired them. Ignoring income taxes, how much gain should LOAD report on this early extinguishment of debt? P15,000

On June 30, 2002, LOAD 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. LOAD acquired all of these bonds at 94 on June 30, 2002, and retired them. Ignoring income taxes, how much gain should LOAD report on this early extinguishment of debt? P15,000

Financial Accounting
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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On June 30, 2002, LOAD 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. LOAD acquired all of these bonds at 94 on June 30, 2002, and retired them.

Ignoring income taxes, how much gain should LOAD report on this early extinguishment of debt?

P15,000

P25,000

P35,000

P60,000

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