Granite Company issued $200,000 of 10 percent first mortgage bonds on January 1, 20X4, at 105. The bonds mature in 10 years and pay interest semiannually on January 1 and July 1. Mortar Corporation purchased $140,000 of Granite's bonds from the original purchaser on January 1, 20X8, for $122,000. Mortar owns 75 percent of Granite's voting common stock. Granite's partial bond amortization schedule is as follows: Based on the information given above, what amount of gain or loss on bond retirement will be reported in the 20X8 consolidated financial statements?

Question

Granite Company issued $200,000 of 10 percent first mortgage bonds on January 1, 20X4, at 105. The bonds mature in 10 years and pay interest semiannually on January 1 and July 1. Mortar Corporation purchased $140,000 of Granite's bonds from the original purchaser on January 1, 20X8, for $122,000. Mortar owns 75 percent of Granite's voting common stock. Granite's partial bond amortization schedule is as follows:  Based on the information given above, what amount of gain or loss on bond retirement will be reported in the 20X8 consolidated financial statements?

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The Answer of Granite Company issued $200,000 of 10 percent first mortgage bonds on January 1, 20X4, at 105. The bonds mature in 10 years and pay interest semiannually on January 1 and July 1. Mortar Corporation purchased $140,000 of Granite's bonds from the original purchaser on January 1, 20X8, for $122,000. Mortar owns 75 percent of Granite's voting common stock. Granite's partial bond amortization schedule is as follows:  Based on the information given above, what amount of gain or loss on bond retirement will be reported in the 20X8 consolidated financial statements?

Granite Company Issued $200,000 of 10 Percent First Mortgage Bonds