On June 30, 2008, Rosen Co. had outstanding 8%, $3,000,000 face amount, 15-year bonds maturing on June 30, 2018. Interest is payable on June 30 and December 31. The unamortized balances in the bond discount and deferred bond issue costs accounts on June 30, 2008 were $105,000 and $30,000, respectively. On June 30, 2008, Rosen acquired all of these bonds at 94 and retired them. What net carrying amount should be used in computing gain or loss on this early extinguishment of debt?
A) $2,970,000
B) $2,895,000
C) $2,865,000
D) $2,820,000

Question

Quizplus · Accepted Answer

$3,000,000 - ($105,000 + $30,000) = $2,865,000.