X2 Buys Back the Bonds for $103,000 Immediately After the Interest

question 70

Multiple Choice

X2 buys back the bonds for $103,000 immediately after the interest payment on 12/31/12 and retires them. What gain or loss, if any, would X2 record on this date?

• A) No gain or loss.
• B) $3,000 gain.
• C) $1,202 loss.
• D) $327 loss.

---

Definitions:

Theoretical Capacity

The highest possible level of production an organization can achieve under ideal circumstances, with no downtime for maintenance or repairs.

Peak Efficiency

The state of operating at the highest possible efficiency where resources are used most effectively, often related to machines, processes, or systems.

Operation Manual

A document containing instructions and guidelines on how to perform operations or tasks within an organization or for a specific equipment.

Reciprocal Method

An accounting technique used to allocate support department costs to producing departments, considering the mutual services exchanged between support departments.