Question

Schwer, Inc. issued $500,000 of 10%, 15-year bonds at 95 on July 1, 2012. Interest is payable semiannually on December 31 and June 30. Through June 30, 2017 Schwer amortized $6,000 of the bond discount. On July 1, 2017. Schwer retired the bonds at 102. Calculate the loss on bond retirement at July 1, 2017.

Answer 1

Answer: The answer is - A

Explanation:

A

1) RETIRED 500 000 *102= 510 000 (PREM)

2) 500 000 *95=$475 000 MARKET PRICE (DISCOUNT)

3)475 000-510 000= 35 000 LOSS

35000 -6000=$29 000 LOSS