Extinguishment of Bonds Prior to Maturity On December 1, Year 1, Cone Company issued its 10%,...

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Extinguishment of Bonds Prior to Maturity On December 1, Year 1, Cone Company issued its 10%, $610,000 face value bonds for $710,000, plus accrued interest. Interest is payable on November 1 and May 1. On December 31, Year 3, the book value of the bonds, inclusive of the unamortized premium, was $650,000. On July 1, Year 4, Cone reacquired the bonds at 97 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. Required: Prepare a schedule to compute the gain or loss on this redemption of debt. Enter all values as positive values. Cone Company Computation of Gain on Extinguishment of Debt July 1, Year 4 Book value of bonds on December 1, Year 1 $710,000 Book value of bonds on December 31, Year 3 650,000 Amortization for 25 months 72,000 Monthly amortization Book value of bonds on December 31, Year 3 $ Amortization for January 1 to July 1, Year 4 Book value of bonds on July 1, Year 4 Cost of reacquisition Gain on bond redemption Feedback Check My Work Extinguishment of Bonds Prior to Maturity On December 1, Year 1, Cone Company issued its 10%, $610,000 face value bonds for $710,000, plus accrued interest. Interest is payable on November 1 and May 1. On December 31, Year 3, the book value of the bonds, inclusive of the unamortized premium, was $650,000. On July 1, Year 4, Cone reacquired the bonds at 97 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. Required: Prepare a schedule to compute the gain or loss on this redemption of debt. Enter all values as positive values. Cone Company Computation of Gain on Extinguishment of Debt July 1, Year 4 Book value of bonds on December 1, Year 1 $710,000 Book value of bonds on December 31, Year 3 650,000 Amortization for 25 months 72,000 Monthly amortization Book value of bonds on December 31, Year 3 $ Amortization for January 1 to July 1, Year 4 Book value of bonds on July 1, Year 4 Cost of reacquisition Gain on bond redemption Feedback Check My Work

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