Stanton Heights Corporation issued $95,000 face value bonds at a discount of $5,000. The bonds contain a call price of 102. Stanton Heights decides to redeem the bonds early when the unamortized discount is $2,750.

Required
1. Calculate Stanton Heights 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

Stanton Heights Corporation issued $95,000 face value bonds at a discount of $5,000. The bonds contain a call price of 102. Stanton Heights decides to redeem the bonds early when the unamortized discount is $2,750.

Required
1. Calculate Stanton Heights 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.

Quizplus · Accepted Answer

The Answer of Stanton Heights Corporation issued $95,000 face value bonds at a discount of $5,000. The bonds contain a call price of 102. Stanton Heights decides to redeem the bonds early when the unamortized discount is $2,750.

Required
1. Calculate Stanton Heights 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.

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