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7 February, 08:52

Bonds Payable has a balance of $810,000 and Premium on Bonds Payable has a balance of $8,910. If the issuing corporation redeems the bonds at 102, what is the amount of gain or loss on redemption?

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  1. 7 February, 09:08
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    Loss on redemption = $16,200 - $10,395 = $5,805

    Explanation:

    Loss on redemption = $8,505

    Redemption value of bonds = $810,000 * 102% = $ 826.200

    Premium on bonds payable = $ 826.200 - $810,000 = $16,200

    Loss on redemption = $16,200 - $10,395 = $5,805
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