Dear friends, could you help me solve this quiz:
The December 31, 1998, balance sheet of Drabek Corporation includes
The following items:
9% bonds payable due December 31, 2007 $500,000
Unamortized premium on bonds payable 13,500
The bonds were issued on December 31, 1997, at 103, with interest
Payable on July 1 and December 31 of each year. Drabek uses
Straight-line amortization.
On March 1, 1999, Drabek retired $200,000 of these bonds at 98 plus
Accrued interest. What should Drabek record as an extraordinary
Gain on retirement of these bonds? Ignore taxes.
a. $9,400.
b. $5,400.
c. $9,300.
d. $10,000.
