Question: Freed Corporation has outstanding 800 000 of 8 percent bonds callable

Freed Corporation has outstanding $800,000 of 8 percent bonds callable at 104. On September 1, immediately after recording the payment of the semiannual interest and the amortization of the discount, the unamortized bond discount equaled $21,000.
On that date, $480,000 of the bonds was called and retired.
1. How much cash must be paid to retire the bonds?
2. Is there a gain or loss on retirement, and if so, how much is it?

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  • CreatedMarch 26, 2014
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