Amortization of bond premium on the straight-line method

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Reference no: EM131315773

January 1, 2011, Gonzalez Corporation issued $44,511 10% 14-year bonds at 103. Gonzalez has recorded amortization of the bond premium on the straight-line method (which was not materially different from the effective-interest method). On December 31, 2017, when the fair market value of the bonds was 94, Gonzalez repurchased $10,198 of the bonds in the open market at 94. Gonzalez has recorded interest and amortization for 2017. Ignoring income taxes and assuming that the gain is material, what amount of gain/loss should Gonzalez report for the repurchase?

Reference no: EM131315773

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Amortization of bond premium on the straight-line method : January 1, 2011, Gonzalez Corporation issued $44,511 10% 14-year bonds at 103. Gonzalez has recorded amortization of the bond premium on the straight-line method (which was not materially different from the effective-interest method).

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