A bond with a $ 200,000 maturity value is immediatly retired for $ 212,000 plus accrued interest.

Fantastic news! We've Found the answer you've been seeking!

Question:

A bond with a $ 200,000 maturity value is immediatly retired for $ 212,000 plus accrued interest. The discount on bonds payable ( bond discount) at the retirement date is $ 15,5000. Which of the following statement is correct?

a- the gain on the debt extinguishment is $ 5,000

b- the loss on the debt extinguishment is $ 20,500

c- the gain on the debt extinguishment is $ 30,500

d- the gain or loss on the debt extinguishment can't be determined without knowing the dollar amount of the accrued interest.

Related Book For answer-question

Corporate Finance A Focused Approach

ISBN: 978-1439078082

4th Edition

Authors: Michael C. Ehrhardt , Eugene F. Brigham

See More Books

Posted Date: Nov 17, 2020 08:15 PM

See More Questions

Which of the following statements is correct with respect to Fiduciary Funds? Multiple Choice Custodial funds are fiduciary funds which are used when resources are held by a government in a trustee...
Which of the following statements is correct regarding the payback method as a capital budgeting technique? a. The payback method considers the time value of money. b. An advantage of the payback...
Which of the following statements is correct (where F is a continuously differentiable vector field defined everywhere)? (a) The flux of curl(F) through all surfaces is zero. (b) If F = , then the...
In baseball, a players batting average is the proportion of times the player gets a hit out of his total number of times at bat. The distribution of batting averages in a recent season for Major...
Draw and name all possible isomers of pentene.
Explain when it may be appropriate to seek a guardianship in a family violence case.
Suppose that country A has 9,000 worker hours available for production and that it initially has the technology given by case 3 of Exercise 1. Derive its PPF and determine its exact dimensions. data...
1. Applying the standard test outlined previously, does the employer (CSPMI) meet the definition of "an employer" as stated in Section 2 (2), LMRA and therefore, the board may assert jurisdiction and...
You are planning to retire in 30 years. You want to be able to spend $40,000 per year in retirement, adjusted for inflation (so you will spend the equivalent in each year of $40,000 in today's...
You will play the roles of a Freight Forwarder and a materials and distribution manager for Apotex Pharmaceuticals in Toronto. Your role is the materials and distribution manager for Apotex...
Suppose you have a sample of scores for time on target of a tracking task. In this task, a person must follow a moving target with a mouse on a computer screen. The amount of time the person follows...
Which factor do you think is most important when deciding whether to establish business operations in another country? Explain your rationale.
Which of the following would not be a mineral interest? a. Production payment interest b. Working interest c. Overriding royalty interest d. Surface rights interest e. Net profits interest f. Royalty...
Are the three main elements of compensation systemsinternal consistency, market competitiveness, and recognizing employee contributionsequally important, or do you believe that they differ in...
Match each term with its definition. Term 1. Categorical Data 2. Trend 3. Proportion 4. Numerical data 5. Scatterplot 6. Time series data Definition a. The values of two variables, each plotted on...
This chapter described the concept of a firms balance sheet. Individuals and households have balance sheets as well, and the broad categories in them are the same as those on a firms balance sheet....
Q. 9. For the following task table, draw the network diagram, calculate total duration of the project and find the critical path. (10) Task Successor Duration (days) BAGHIDKECU J A, F | K C F, H C K...
Define cultural intelligence. Cite the books or journal articles you found in Capella's library. Explain why cultural intelligence is important for HR practitioners and other organizational managers.
What is reinvestment rate risk? Which has more reinvestment rate risk, a 1-year bond or a 10-year bond?
Profit margins and turnover ratios vary from one industry to another. What differences would you expect to find between a grocery chain such as Safeway and a steel company? Think particularly about...
Suppose a firm estimates its overall cost of capital for the coming year to be 10%.What might be reasonable costs of capital for average-risk, high-risk, and low-risk projects?
Using the demand and cost curves of an individual firm in oligopoly, demonstrate the effects of each of the following: a. The Clean Air Act b. The Nutrition and Labeling Act c. A ban on smoking...
Kodak has developed an important brand name through its advertising, innovation, and product quality and service. Suppose Kodak sets up a network of exclusive dealerships, and one of the dealers...
Explain why a market in which broadcast licenses can be purchased might be more efficient than having the FCC assign licenses on some basis designed by the FCC.

A bond with a $ 200,000 maturity value is immediatly retired for $ 212,000 plus accrued interest.

Question:

Expert Answer:

Corporate Finance A Focused Approach

Students also viewed these accounting questions