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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Redemption of Bonds
Reynolds Corporation issued $75,000 face value bonds at a discount of $2,500. The bonds contain
a call price of 103. Reynolds decides to redeem the bonds early when the unamortized discount
is $1,750.
Required
1. Calculate Reynolds Corporation’s gain or loss on the early redemption of the bonds.
2. Describe how the gain or loss would be reported on the income statement and in the notes to
the financial statements.
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