On January 1, 2004, F Corp

question 44

Multiple Choice

On January 1, 2004, F Corp. issued 2,000 of its 10%, $1,000 bonds for $2,080,000. These bonds were to mature on January 1, 2014, but were callable at 101 any time after December 31, 2007. Interest was payable semiannually on July 1 and January 1. On July 1, 2009, F called all of the bonds and retired them. The bond premium was amortized on a straight-line basis. Before income taxes, F's gain or loss in 2009 on this early extinguishment of debt was:

• A)$16,000 gain.
• B)$20,000 loss.
• C)$24,000 gain.
• D)$60,000 gain.

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Definitions:

Financial Problems

Issues related to managing money, including debts, insufficient income, or inability to meet expenses.

Full-Time

Employment or educational status that typically requires a person's full availability during regular working or schooling hours.

Socialization

The process by which individuals learn and adopt the norms, values, behaviors, and social skills appropriate to their society or social group.

Perspective-Taking

The ability to understand and consider the world from someone else's viewpoint, an important social-cognitive skill in developing empathy.