Herman Company Received Proceeds of ₤565,500 on 10-Year, 8% Bonds

question 237

Multiple Choice

Herman Company received proceeds of ₤565,500 on 10-year, 8% bonds issued on January 1, 2012. The bonds had a face value of ₤600,000, pay interest semi-annually on June 30 and December 31, and have a call price of 101. Herman uses the straight-line method of amortization. Herman Company decided to redeem the bonds on January 1, 2014. What amount of gain or loss would Herman report on its 2014 income statement?

• A) ₤27,600 gain
• B) ₤33,600 gain
• C) ₤33,600 loss
• D) ₤27,600 loss

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Definitions:

Ophiocordyceps

A genus of fungi known for parasitizing insects and other arthropods, causing altered behaviors that benefit the fungus's dissemination.

Fungal Spores

Reproductive units produced by fungi, capable of developing into new fungal organisms under suitable environmental conditions, important for fungal distribution and diversity.

Selfishness

Behavior in which an individual puts its own interests above those of others, often at the expense of group welfare.

Behavioral Syndromes

Consistent patterns of behavior across different situations, often seen in animals, including humans, indicating a possible genetic or environmental basis.