Question

A company has bonds outstanding with a par value of $100,000. The unamortized discount on these...

A company has bonds outstanding with a par value of $100,000. The unamortized discount on these bonds is $4,500. The company retired these bonds by buying them on the open market at 97. What is the gain or loss on this retirement?
Select one:
a. $1,500 gain.
b. $3,000 gain
c. $0 gain or loss.
d. $1,500 loss.

Partners Ana, Beth, and Cathy have capital account balances of $90,000 each. The income and loss ratio is 5:2:3, respectively. In the process of liquidating the partnership, noncash assets with a book value of $75,000 are sold for $30,000. The balance of Ana’s Capital account after the sale is
Select one:
a. $67,500.
b. $99,000.
c. $76,500.
d. $81,000.

Please Solve As soon as
Solve quickly I get you two UPVOTE directly
Thank's
Abdul-Rahim Taysir

Homework Answers

Answer #1

Sol 1 - The calculation of the above is as follows-

Given,

Par value of bonds = $100,000

Unamortized discount = $4,500

Carrying value = $100,000 - $4,500

= $95,500

Loss/gain = ($100,000 * 0.97) - $95,500

Loss = $1,500

Therefore, the correct option is (d) $1,500 loss

Sol - 2 The solution is as follows

Loss on sale of non cash asset = $75,000 - $30,000

= $45,000

Ana capital before sale = $90,000

Ana share in loss = $45,000 * 5/10 = $22,500

Ana capital after the sale is = $90,000 - $22,500 = $67,500

Therefore, the correct option is (a) that is $67,500

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