Beonce Company Received Proceeds of $188,000 on 10-Year, 6% Bonds

question 52

Multiple Choice

Beonce Company received proceeds of $188,000 on 10-year, 6% bonds issued on January 1, 2013. The bonds had a face value of $200,000, pay interest annually on January 1, and have a call price of 101. Beonce uses the straight-line method of amortization. Beonce Company decided to redeem the bonds on January 1, 2015. What amount of gain or loss would Beonce report on its 2015 income statement?

• A) $9,600 gain
• B) $11,600 gain
• C) $11,600 loss
• D) $9,600 loss

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Definitions:

Opportunity Cost

The toll taken for not picking the second highest preference when decisions are formulated.

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A reduction in the amount of taxes imposed by the government, which can affect individuals, corporations, or specific sectors.

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The total spending by state governments on various public services, infrastructure, education, and welfare programs.

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