At December 31, 2017, the following balances existed for Sweeney Corporation:
Bonds Payable (10%)
$1,500,000
Premium on Bonds Payable
40,000
The bonds mature on 12/31/22. Straight-line amortization is used.
If 30% of the bonds are retired at 105 on January 1, 2019, what is the loss on early extinguishment?
I have completed this problem a couple different ways and am not sure which one is right. I know there is a year of amortization at 8000 but I guess I am confused on what numbers to use for the what the Bonds payable would be on the day of extinguishment. Would I use the 1,500,000 * .30 or 1,532,000 *.30