On July 1, 2019, Michigan Company has bonds with balances as shown below.
If the company retires the bonds for $74,150, what will be the effect on the income statement?
A) gain on retirement of $6950
B) loss on retirement of $6950
C) gain on retirement of $650
D) loss on retirement of $650
C) gain on retirement of $650
Explanation: Face value of the bonds being retired $71,000
Add: Premium on Bonds Payable 3800
Carrying Amount of Bonds Payable $74,800
Market price paid to retire the bonds 74,150
Gain on retirement of Bonds Payable $650
You might also like to view...
It has been observed that most new products have shorter product life cycles. What is the reason for this?
A) Most new products do not use technology. B) Most new products are not backed by a marketable idea. C) New products do not get adequate management support. D) Social and governmental constraints lead to this failure. E) Rivals quickly copy products that are successful.
Management fraud is regarded as more serious than employee fraud. Three special characteristics have been discussed for management fraud. What are they? Explain
Analyzing ________ involves focusing on information needs, motivation and benefits, and potential resistance
A) your audience's needs B) your purpose C) medium choices D) your desired outcome E) the business result
Comparative advertising
A. is illegal according to the FTC. B. must focus on major consumer benefits to be legal. C. is usually ignored by consumers. D. should be supported by research evidence. E. None of these answers is correct.