Improv Corporation issued $95,000 face value bonds at a discount of $5,000. The bonds contain a call price of 102.
Improv decides to redeem the bonds early when the unamortized discount is $2,750.
REQUIRED:
1. Calculate Improv Corporation's gain or loss on the early redemption of the bonds.
2. Describe how the gain or loss would be reported on the income statement and in the notes to the financial statements.

Question

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The Answer of Improv Corporation issued $95,000 face value bonds at a discount of $5,000. The bonds contain a call price of 102.
Improv decides to redeem the bonds early when the unamortized discount is $2,750.
REQUIRED:
1. Calculate Improv Corporation's gain or loss on the early redemption of the bonds.
2. Describe how the gain or loss would be reported on the income statement and in the notes to the financial statements.

Improv Corporation Issued $95,000 Face Value Bonds at a Discount