How much is the gain on the redemption of the bonds

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In the statement of financial position of Magnolia, Inc. as of December 31,2015, the following accounts appear:

18% Bonds Payable, due January 1, 2017 P1, 000,000

Premium on Bonds Payable 70,000

Accrued Interest on Bonds Payable 90,000

Interest is payable semi-annually on January 1 and July 1. On January 1, 2016, Magnolia, Inc. redeemed the bonds at 96 plus accrued interest.

Question 1: How much is the gain (or loss) on the redemption of the bonds?

a. P 40,000

b. P (40,000)

c. P 110,000

d. P (110,000)

Reference no: EM132577984

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