What is the amount of gain or loss on the retirement

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Question: 1. Five-year, 6% bonds with a $100,000 par value are issued at a price of $91,893. Interest is paid semiannually, and the bonds' market rate is 8% on the issue date. Are these bonds issued at a discount or a premium? Explain your answer.

2. Six years ago, a company issued $500,000 of 6%, eight-year bonds at a price of 95. The current carrying value is $493,750. The company decides to retire 50% of these bonds by buying them on the open market at a price of 1021 ⁄2. What is the amount of gain or loss on the retirement of these bonds?

Reference no: EM131534547

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