8. A bond issued with a par value of $200,000 and a carrying amount of $195,500 isretired at 98.5. The gain or loss on this transaction is:discont= 4500BondPayabl200000A) $3,000 loss.B) $3,000 gain.C) $1,500 loss.D) $1,500 gain.discoutDebit4500199901.5

The bonds are the financial instruments for the business used to raise the money from the market or…

8. A bond issued with a par value of $200,000 and a carrying amount of $195,500 is retired at 98.5. The gain or loss on this transaction is: dicont u Bond Payabl 200000 A) $3,000 loss. B) $3,000 gain. C) $1,500 loss. D) $1,500 gain. discout 4500 19991

8. A bond issued with a par value of $200,000 and a carrying amount of $195,500 is retired at 98.5. The gain or loss on this transaction is: dicont u Bond Payabl 200000 A) $3,000 loss. B) $3,000 gain. C) $1,500 loss. D) $1,500 gain. discout 4500 19991

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Debenture Valuation

A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.

Note Valuation

It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like:

Question

8. A bond issued with a par value of $200,000 and a carrying amount of $195,500 is
retired at 98.5. The gain or loss on this transaction is:
discont
= 4500
Bond
Payabl
200000
A) $3,000 loss.
B) $3,000 gain.
C) $1,500 loss.
D) $1,500 gain.
discout
Debit
4500
199901.5

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