Both firms use the straight-line method of amortization


Question - Powell Company owns an 80% interest in Sauter, Inc. On January 1, 20X1, Sauter issued $400,000 of 10- year, 12% bonds at a premium of $50,000. On December 31, 20X5, 5 years after original issuance, Powell purchased all of the outstanding bonds for $390,000. Both firms use the straight-line method of amortization. What is the gain on retirement on the 20X5 consolidated income statement?

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Accounting Basics: Both firms use the straight-line method of amortization
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