Question: (Entries for Retirement and Issuance of Bonds) Friedman Company had bonds outstanding with a maturity value of $500,000. On April 30, 2011, when these bonds

(Entries for Retirement and Issuance of Bonds) Friedman Company had bonds outstanding with a maturity value of $500,000. On April 30, 2011, when these bonds had an unamortized discount of $10,000, they were called in at 104. To pay for these bonds, Friedman had issued other bonds a month earlier bearing a lower interest rate. The newly issued bonds had a life of 10 years. The new bonds were issued at 103 (face value $500,000). Issue costs related to the new bonds were $3,000. Ignoring interest, compute the gain or loss and record this refunding transaction.

(AICPA adapted)

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