Question: 1. Nickel Inc. bought $500,000 of 3-year, 9% bonds as an investment on December 31, 2015 for $545,000. Nickel uses straight-line amortization. On May 1, 2016, $100,000 of the bonds were redeemed at 120. As a result of the retirement, Nickel will report
2. On March 1, 2016, E Corp. issued $1,000,000 of 10% nonconvertible bonds at 107, due on February 28, 2026. Each $1,000 bond was issued with 30 detachable stock warrants, each of which entitled the holder to purchase, for $65, one share of Evan's $25 par common stock. On March 1, 2016, the market price of each warrant was $3. By what amount should the bond issue proceeds increase shareholders' equity?
3. On June 30, 2016, K Co. had outstanding 9%, $10,500,000 face value bonds maturing on June 30, 2021. Interest is payable semiannually every June 30 and December 31. On June 30, 2016, after amortization was recorded for the period, the unamortized bond premium and bond issue costs were $50,000 and $105,000, respectively. On that date, K acquired all its outstanding bonds on the open market at 99 and retired them. At June 30, 2016, what amount should K Co. recognize as gain on redemption of bonds before income taxes?
4. On January 1, 2011, F Corp. issued 2,900 of its 10%, $1,000 bonds for $2,994,000. These bonds were to mature on January 1, 2021, but were callable at 101 any time after December 31, 2014. Interest was payable semiannually on July 1 and January 1. On July 1, 2016, F called all of the bonds and retired them. The bond premium was amortized on a straight-line basis. Before income taxes, F Corp.'s gain or loss in 2016 on this early extinguishment of debt was?