A Corporation Issued 8% Bonds with a Par Value of $1,000,000,receiving

question 17

Multiple Choice

A corporation issued 8% bonds with a par value of $1,000,000,receiving a $20,000 premium.On the interest date 5 years later,after the bond interest was paid and after 40% of the premium had been written off,the corporation purchased the entire issue on the open market at 99 and retired it.The gain or loss on this retirement is:

• A)$0
• B)$10,000 gain
• C)$10,000 loss
• D)$22,000 gain
• E)$22,000 loss

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Definitions:

Foundation of Competition

The underlying principles and conditions that drive rivalry among firms in an industry to achieve superiority.

Four-drive Theory

A motivational theory proposing that human beings are driven by the desires to acquire, bond, learn, and defend.

Esteem

Relates to the self-respect, self-worth, or regard that an individual has for themselves; can also refer to the admiration one receives from others.

Four-drive Theory

A motivational theory positing that human behavior is driven by four basic needs: the drive to acquire, bond, comprehend, and defend.