FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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4) On January 2, 2006, a company sold a 20-year, 6% coupon bond issue with a face value of
$10,000 for $8,932 (rounded to the nearest whole dollar). The required coupon payments
are made semi-annually on June 30th and December 31st each year.
If the company redeems the issue of bonds payable for $9,036 in the market on January 2,
2021 (after the issue has been outstanding for 15 years), the gain or loss recognized on re-
demption amounts to:
A)
B)
C)
D)
E)
$548 Gain
$ 44 Gain
$652 Loss
$104 Loss
$148 Loss
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Transcribed Image Text:4) On January 2, 2006, a company sold a 20-year, 6% coupon bond issue with a face value of $10,000 for $8,932 (rounded to the nearest whole dollar). The required coupon payments are made semi-annually on June 30th and December 31st each year. If the company redeems the issue of bonds payable for $9,036 in the market on January 2, 2021 (after the issue has been outstanding for 15 years), the gain or loss recognized on re- demption amounts to: A) B) C) D) E) $548 Gain $ 44 Gain $652 Loss $104 Loss $148 Loss
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