If Bonds with Face Value of $ 100,000 Are Redeemed

question 25

Multiple Choice

If bonds with face value of $ 100,000 are redeemed at 98 before maturity when the amortized cost is $ 92,000, what would be the resulting gain or loss on the transaction?

• A) loss of $ 1,840
• B) loss of $ 6,000
• C) gain of $ 6,000
• D) gain of $ 1,840

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Definitions:

Wages Expense

The total amount of money paid to employees for work performed, reported on the income statement.

Clawback Provisions

Terms included in contracts that require an individual to return money previously earned, often used to reclaim bonuses or other compensation under certain conditions.

Whistleblower Provisions

Regulations and policies that protect individuals who report illegal or unethical activities within an organization.

Sarbanes-Oxley Act

A U.S. federal law that aimed to protect investors by making corporate disclosures more reliable and accurate, enacted in response to financial scandals.