The bonds are 10000000 6 10-year bonds calculate the gain


Question - The Sonia Corporation is considering retiring one of its bond issues. The bonds are $10,000,000, 6%, 10-year bonds, issued five years ago at par.

Calculate the gain or loss the company would recognize if it retired the bonds for $9,700,000. Assume that all appropriate interest payments have been made on the bonds before they are retired.

a. $900,000 gain

b. $300,000 loss

c. $0

d. $300,000 gain

Solution Preview :

Prepared by a verified Expert
Accounting Basics: The bonds are 10000000 6 10-year bonds calculate the gain
Reference No:- TGS02896448

Now Priced at $20 (50% Discount)

Recommended (96%)

Rated (4.8/5)