Question: On December 1 2008 the Cone Company issued its 10

On December 1, 2008, the Cone Company issued its 10%, $2 million face value bonds for $2.3 million, plus accrued interest. Interest is payable on November 1 and May 1. On December 31, 2010, the book value of the bonds, inclusive of the unamortized premium, was $2.1 million. On July 1, 2011, Cone reacquired the bonds at 98, plus accrued interest. Cone appropriately uses the straight-line method for the amortization because the results do not materially differ from those of the effective interest method.

Prepare a schedule to compute the gain or loss on this extinguishment of debt. Show supporting computations in good form.

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  • CreatedDecember 09, 2013
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