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german
3 years ago
11

Bonds Payable has a balance of $1,000,000 and Discount on Bonds Payable has a balance of $15,500. If the issuing corporation red

eems the bonds at 98 1/2, what is the amount of gain or loss on redemption
Business
1 answer:
sineoko [7]3 years ago
8 0

Answer:

Loss on Redemption = $500

Explanation:

<u>Gain or Loss on redemption:</u>  

Par value of Bonds                $1,000,000

Less: Discount on bonds       <u>$15,500</u>

Book Value of Bonds            $984,500

Less: Redemption value        <u>$985,000</u>  ($1,000,000 * 98.50%)  

Loss on Redemption             <u>$500</u>

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2 years ago
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