Chang Industries has bonds outstanding with a par value of $222,400 and a carrying value of $236,600. If the company calls these bonds at a price of $229,000, the gain or loss on retirement is:

Question

5.15K viewsOctober 16, 2016

0

Darshita 6.14K October 16, 2016 0 Comments

$14,200 gain.

$6,600 gain.

$6,600 loss.

$7,600 loss.

$7,600 gain.

1 Answer

score 0 · Answer 1 · 2016-10-16T06:46:25+00:00

Answer : Gain $ 7600

Working notes for the above answer

Chang Industries has bonds outstanding with a par value of $222,400

Bond carrying value of $236,600.

The company calls these bonds at a price of $229,000,

The gain or loss on retirement is as follow

Carrying Value – cash paid to retire bonds = gain or loss on bond retirement

Particular
Amount in $

carrying value
236600

Less:

Calling at a price
229000

Gain
7600

1 Answer

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