The 10% Bonds Payable of Nixon Company Had a Net

question 61

Multiple Choice

The 10% bonds payable of Nixon Company had a net carrying amount of $570,000 on December 31, 2010.The bonds, which had a face value of $600,000, were issued at a discount to yield 12%.The amortization of the bond discount was recorded under the effective-interest method.Interest was paid on January 1 and July 1 of each year.On
July 2, 2011, several years before their maturity, Nixon retired the bonds at 102.The interest payment on July 1, 2011 was made as scheduled.What is the loss that Nixon should record on the early retirement of the bonds on July 2, 2011? Ignore taxes.

• A)$12,000.
• B)$37,800.
• C)$33,600.
• D)$42,000.

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Definitions:

Red-Circled Employees

Workers whose pay exceeds the maximum of the pay range for their job grade, often as a result of salary adjustments or a change in job structure.

Simple Tasks

Simple tasks refer to work assignments or duties that are straightforward and require minimal skill or effort to complete.

Compensation Management

The systematic approach to providing monetary and non-monetary rewards to employees in exchange for their work.

Organizational Objectives

The goals or targets a company aims to achieve, which guide its operational activities and strategic planning.