Answer:
$215,000
Explanation:
Calculation for the amount that K Co. Should recognize as gain on redemption of bonds before income taxes
First step is to find book value of bonds at June 30, 2021
Book value of bonds= ($15,000,000 + $65,000)
Book value of bonds=$15,065,000
Second step is to find the amount of gain on redemption of bonds before income taxes
Gain on redemption of bonds before income taxes=$15,065,000-( 99% × $15,000,000)
Gain on redemption of bonds before income taxes=$15,065,000-$14,850,000
Gain on redemption of bonds before income taxes=$215,000
Therefore the amount that K Co. Should recognize as gain on redemption of bonds before income taxes will be $215,000
