Herman Company received proceeds of ₤471,250 on 10-year, 8% bonds issued on January 1, 2012. The bonds had a face value of ₤500,000, pay interest semi-annually on June 30 and December 31, and have a call price of 101. Herman uses the straight-line method of amortization. Herman Company decided to redeem the bonds on January 1, 2014. What amount of gain or loss would Herman report on its 2014 income statement?
A) ₤23,000 gain
B) ₤28,000 gain
C) ₤28,000 loss
D) ₤23,000 loss

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The Answer of Herman Company received proceeds of ₤471,250 on 10-year, 8% bonds issued on January 1, 2012. The bonds had a face value of ₤500,000, pay interest semi-annually on June 30 and December 31, and have a call price of 101. Herman uses the straight-line method of amortization. Herman Company decided to redeem the bonds on January 1, 2014. What amount of gain or loss would Herman report on its 2014 income statement?
A) ₤23,000 gain
B) ₤28,000 gain
C) ₤28,000 loss
D) ₤23,000 loss

Herman Company Received Proceeds of ₤471,250 on 10-Year, 8% Bonds