Question

On February 1, 2012, Davis Corporation issued 12%, $1,000,000 par, 10-year bonds for $1,117,000. Davis reacquired all of these bonds at 102% of par, plus accrued interest, on May 1, 2015, and retired them. The unamortized bond premium on that date was $78,000.

Required:
Before income taxes, what was Davis’s gain or loss on the bond extinguishment?



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  • CreatedSeptember 10, 2014
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