On January 1, 2018, Tiny Tim Industries Had Outstanding $1,000,000

question 242

Multiple Choice

On January 1, 2018, Tiny Tim Industries had outstanding $1,000,000 of 12% bonds with a book value of $966,130. The indenture specified a call price of $981,000. The bonds were issued previously at a price to yield 14% and interest payable semi-annually on July 1 and January 1. Tiny Tim called the bonds (retired them) on July 1, 2018. What is the amount of the loss on early extinguishment?

• A) $0.
• B) $6,932.
• C) $7,241.
• D) $7,629.

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Definitions:

Materialistic

Describes a value system that is preoccupied with possessions and the social status they convey, rather than intangible qualities or values.

Consciousness

The state of being aware of and able to think about oneself, one's surroundings, and one's thoughts and feelings.

Teratogens

Environmental substances that can harm prenatal development.

Folic Acid

A type of B vitamin that is crucial in the production and repair of DNA and other genetic material, and is especially important in prenatal development.