4. At December 31, 2020, the following balances existed for AAA Corporation: Bonds Payable (4%) $500,000...
4. At December 31, 2020, the following balances existed for AAA Corporation: Bonds Payable (4%) $500,000 Discount on Bonds Payable 10,000 The bonds mature on 12/31/27. Straight-line amortization is used. If 30% of the bonds are retired at 105 on January 1, 2024, what is the gain or loss on early extinguishment? Answer $_______________ Required: Compute the answer for each of the four problems. Show supporting computation. No need to show questions.
Homework Answers
| Cell Reference | Particulars | Amount $ |
| A | Face value of bond outstanding as at December 31,2020 | 500,000 |
| B | % of bonds early retired | 30% |
| C=A*B | Value of bond retired | 150,000 |
| D=C*105% | Bond being retired at an value of $ 105 | 157,500 |
| E=C-D | Loss on early retirement of bonds | (7,500) |
| F | 30% of discount on bond payable | 3,000 |
| G=E-F | Loss on early retirement of bonds | (4,500) |
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