What is the carrying value of the bonds on redemption data

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On January 1, 2014, Benbrook Company issued bonds with a face value of $50,000. The bonds mature in five years, and pay interest annually at a stated rate of 10%. Since the market rate at the time of the issue was 12%, the bonds were sold at a discount; the actual issue price was $46,395.

On January 1, 2016, Benbrook decides to redeem the bonds payable at the specified redemption price of 101.

What is the carrying value of the bonds on the redemption date?

a.

$50,000

b.

$47,598

c.

$46,962

d.

$46,395

e.

none of the above

Refer to the information above for Benbrook Corporation.

How much gain or loss with the company recognize on the bond redemption?

a.

$500 loss

b.

$2,902 loss

c.

$3,538 loss

d.

$3,605 loss

e.

none of the above

Reference no: EM131797324

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