Ask Question
25 October, 17:03

On July 1, 2019, Montana Company has bonds with balances as shown below. Bonds Payable 66,000 Discount on Bonds Payable 3,800 If the company retires the bonds for $71,150 , what will be the effect on the income statement?

+1
Answers (1)
  1. 25 October, 17:12
    0
    Loss on the retirement of $4,750

    Explanation:

    The following have the effect on the income statement which is a loss on the retirement and it amounts to $4,750

    It is computed as:

    Loss on retirement = Retirement value of the bonds - Issued price of the bonds

    = $71,150 - $66,400

    = $4,750

    Working Note:

    Issued Price of bonds = Face value - Discount on bonds payable

    = $70,000 - $3,600

    = $66,400
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “On July 1, 2019, Montana Company has bonds with balances as shown below. Bonds Payable 66,000 Discount on Bonds Payable 3,800 If the ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers