1. The December 31, 2016, statement of financial position of ADMS Corporation includes the following: 9% bonds payable due December 31, 2030 $718,900

The bonds have a face value of $700,000 and were issues on December 31, 2015, at 103, with interest payable on July 1 and December 31 of each year. CADMS uses straight-line amortization to amortize bond premiums or discount. On March 1, 2017, ADMS retired $280,000 of these bonds at 98 plus accrued interest. Ignoring income taxes, what should ADMS record as a gain on retirement bonds?

1. $7,560
2. $13,020
3. $13,160
4. $14,000

1. Direct incremental costs incurred to sell shares, such as underwriting costs, should be accounted for as:

1. a reduction of share capital
2. an expense of the period in which the shares are issued
3. an intangible asset
4. a reduction of retained earnings

Answer rating: 100% (QA)

Option b Gain on retirement of bonds 13020 Issue price Face value Premium Carrying Value ... View the full answer