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

question 71

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 amortized, 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:

Immigrants

Individuals who move from one country to another with the intention of settling permanently or for an extended period.

Canada

A country located in the northern part of North America, known for its vast landscapes, multicultural population, and bilingual French and English heritage.

Quiet Revolution

A period of intense socio-political and cultural change in Quebec during the 1960s, characterized by secularization and the modernization of society and government.

Secularization

The process by which religious institutions, practices, and beliefs lose their social significance.