On March 31,2019,Bundy Company retired $10,000,000 of bonds,which have an unamortized premium of $500,000,by paying bondholders $9,850,000.What is the amount of the gain or loss on the retirement of the bonds?

A) $150,000 loss.
B) $150,000 gain.
C) $650,000 gain.
D) $350,000 loss.

Question

Rosie Atkins · Accepted Answer

Final Answer : C, Explanation :  To find out the gain or loss on the retirement of bonds, we need to subtract the amount paid to bondholders from the carrying value of the bonds.Carrying value of bonds = $10,000,000 + $500,000 premium = $10,500,000Gain or loss = Carrying value of bonds - Amount paid to bondholders= $10,500,000 - $9,850,000= $650,000 gainTherefore, the answer is C, $650,000 gain.

On March 31,2019,Bundy Company retired $10,000,000 of bonds,which have an unamortized premium of $500,000,by paying bondholders $9,850,000.What is the amount of the gain or loss on the retirement of the bonds?

A) $150,000 loss.
B) $150,000 gain.
C) $650,000 gain.
D) $350,000 loss.

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On March 31,2019,Bundy Company retired $10,000,000 of bonds,which have an unamortized premium of $500,000,by paying bondholders $9,850,000.What is the amount of the gain or loss on the retirement of the bonds?A) $150,000 loss.B) $150,000 gain.C) $650,000 gain.D) $350,000 loss.

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Learning Objectives

Learning Objectives

Related questions

On March 31,2019,Bundy Company retired $10,000,000 of bonds,which have an unamortized premium of $500,000,by paying bondholders $9,850,000.What is the amount of the gain or loss on the retirement of the bonds?

A) $150,000 loss.
B) $150,000 gain.
C) $650,000 gain.
D) $350,000 loss.