On January 1, 20X2, Tidball's Forensic Services (TFS) issued (sold) $3,000,000 of five-year bonds that pay...

  

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On January 1, 20X2, Tidball's Forensic Services (TFS) issued (sold) $3,000,000 of five-year bonds that pay 6% interest semi-annually on June 30 and December 31. The market rate of interest at time of issuance was 6.5%. The net proceeds realized from the bond sale were $2,906,832, representing the $2,936,832 gross proceeds from the sale less $30,000 in directly attributable issuance costs. TFS classified this liability at amortized cost. On January 1, 20X5, TFS repurchased all $3,000,000 of these bonds in the open market. The bonds were yielding 7% when repurchased. What is the gain or loss that TFS will recognize on derecognition of this bond liability? Oa. $41,007 gain Ob.$14,089 gain Oc$55,096 gain Od.$38,072 loss On January 1, 20X2, Tidball's Forensic Services (TFS) issued (sold) $3,000,000 of five-year bonds that pay 6% interest semi-annually on June 30 and December 31. The market rate of interest at time of issuance was 6.5%. The net proceeds realized from the bond sale were $2,906,832, representing the $2,936,832 gross proceeds from the sale less $30,000 in directly attributable issuance costs. TFS classified this liability at amortized cost. On January 1, 20X5, TFS repurchased all $3,000,000 of these bonds in the open market. The bonds were yielding 7% when repurchased. What is the gain or loss that TFS will recognize on derecognition of this bond liability? Oa. $41,007 gain Ob.$14,089 gain Oc$55,096 gain Od.$38,072 loss

Answer rating: 100% (QA)

A C 1 2 Issue price 3000000 3 Interest 6 ... View the full answer