Winrow Company Received Proceeds of $754,000 on 10-Year, 8% Bonds

question 185

Multiple Choice

Winrow Company received proceeds of $754,000 on 10-year, 8% bonds issued on January 1, 2016. The bonds had a face value of $800,000, pay interest annually on December 31st, and have a call price of 101. Winrow uses the straight-line method of amortization. Winrow Company decided to redeem the bonds on January 1, 2018. What amount of gain or loss would Winrow report on its 2018 income statement?

• A)$36,800 gain
• B)$44,800 gain
• C)$44,800 loss
• D)$36,800 loss

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