On February 1, 2017, Pat Weaver Inc. (PWI) issued 9%, $1,900,000 bonds for $2,200,000. PWI retired all of these bonds o...

Question

Question

On February 1, 2017, Pat Weaver Inc. (PWI) issued 9%, $1,900,000 bonds for $2,200,000. PWI retired all of these bonds on Janu

Answer 1

Answer #1

Par value of bonds = $1,900,000

Unamortized bond premium = $195,700

Carrying value of bonds = Par value of bonds + Unamortized bond premium

= 1,900,000 + 195,000

= $2,095,700

Redemption amount = Par value of bonds x 103%

= 1,900,000 x 103%

= $1,957,000

Gain on redemption of bonds = Carrying value of bonds - Redemption amount

= 2,095,700 - 1,957,000

= $138,700

Second option is the correct option

kindly give a positive rating if you are satisfied with the solution. do comment if you have any query, Thanks.

Answer 2

Similar Homework Help Questions

On February 1, 2020, Pat Weaver Inc. (PWI) issued 7%, $1,600,000 bonds for $1,900,000. PWI retired...

On February 1, 2020, Pat Weaver Inc. (PWI) issued 7%, $1,600,000 bonds for $1,900,000. PWI retired all of these bonds on January 1, 2021, at 104. Unamortized bond premium on that date was $166,400. How much gain or loss should be recognized on this bond retirement? Multiple Choice $112,000 gain. $0 gain. $102,400 gain. $133,000 gain.
On February 1, 2020, Pat Weaver Inc. (PWI) issued 11%, $1,800,000 bonds for $2,100,000. PWI retired...

On February 1, 2020, Pat Weaver Inc. (PWI) issued 11%, $1,800,000 bonds for $2,100,000. PWI retired all of these bonds on January 1, 2021, at 103. Unamortized bond premium on that date was $185,400. How much gain or loss should be recognized on this bond retirement? Multiple Choice o $131,400 gain. O sogon O $231,000 gain. o $198,000 gain
On February 1, 2017, Pat Weaver Inc. (PWI) issued 10%, $1,000,000 bonds for $1,116,000. PWI retired...

On February 1, 2017, Pat Weaver Inc. (PWI) issued 10%, $1,000,000 bonds for $1,116,000. PWI retired all of these bonds on January 1, 2018, at 102. Unamortized bond premium on that date was $92,800. How much gain or loss should be recognized on this bond retirement? rev: 02_22_2018_QC_CS-119332

On February 1, 2020, Pat Weaver Inc. (PWI) issued 10%, $1,000,000 bonds for $1,116,000. PWI retired...

On February 1, 2020, Pat Weaver Inc. (PWI) issued 10%, $1,000,000 bonds for $1,116,000. PWI retired all of these bonds on January 1, 2021, at 102. Unamortized bond premium on that date was $92,800. How much gain or loss should be recognized on this bond retirement? $96,000 gain. $111,800 gain. $72,800 gain. $0 gain.
Saved 10 On February 1, 2020, Pat Weaver Inc. (PWI) issued 9%, $1,100,000 bonds for $1,400,000....

Saved 10 On February 1, 2020, Pat Weaver Inc. (PWI) issued 9%, $1,100,000 bonds for $1,400,000. PWI retired all of these bonds on January 1, 2021, at 105. Unamortized bond premium on that date was $115,500. How much gain or loss should be recognized on this bond retirement? Multiple Choice $126,000 gain. $99,000 gain. $60,500 gain. $0 gain.
Saved Help am #1 On February 1, 2020, Pat Weaver Inc. (PWI) issued 9%, $1,100,000 bonds...

Saved Help am #1 On February 1, 2020, Pat Weaver Inc. (PWI) issued 9%, $1,100,000 bonds for $1.400,000. PWI retired all of these bonds on January 1, 2021, at 105. Unamortized bond premium on that date was $115,500. How much gain or loss should be recognized on this bond retirement? Multiple Choice $126,000 gain. O $99,000 gain $60,500 gain

Problem Two: On January 1, 2017, Ashlock Chemical AG issued €4,000,000, 10%, 10-year bonds at €4,543,627....

Problem Two: On January 1, 2017, Ashlock Chemical AG issued €4,000,000, 10%, 10-year bonds at €4,543,627. This price resulted in an 8% effective-interest rate on the bonds. Ashlock uses the effective-interest method to amortize bond premium or discount. The bonds pay interest semi-annually on January 1 and July 1. Rounding to two decimal places, answer the following: a) Use Present Value of 1 Table and Present Value of an Annuity of 1 Table, and your knowledge of time value of...