Bonds Payable has a balance of $874,000 and Discount on Bonds Payable has a balance of...

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Bonds Payable has a balance of $874,000 and Discount on Bonds Payable has a balance of $8,740. If the issuing corporation red

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Answer 1

Answer #1

b. $13,110 loss

Assuming the price of a bond is $100

Number of bonds available for redemption is

= 874000/100 = 8740 bonds

Given bond redemption value = $97.5

Loss per bond is 100 - 97.5 = $2.5

Total loss on redemption of bonds = 8740 * 2.5 = $21,850

Balance available in discount on bonds payable = $8740

So the net loss = 21850 - 8740 = $13,110

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Answer 2

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