[TeddyRock]

Tropic Incorporated has outstanding 100 million dollars of 6% bonds, due in 4 years. They are callable at 104. They bonds were issue at par and have a current market price of 98

1) If tropics retire 10 million of the bonds by purchasing them from bond holder at the current market price, How much gain or lost will be reported on the income statement

2)Assume that tropics call 10 million dollar of these bonds What will be the effect on the income statement

3) Refer to question A, how much cash will the company pay

Thanks

I got question 1 so far, a gain of 200,000 (10,000,000 X .98)
Bond Payable 10,000,000
Gain 200,000
Cash 9,800,000

[TeddyRock]

I hope I solved it right for question 2.. not sure

what I got is debit bond payable 5,000,000, debit loss for 100,000 and credit cash for 5,100,000

I got 100,00 from (5 mil X 1.02) then subtract that total from 5 mil

am I correct..

Edit: I also have one more question that I answer but not sure about the answer

Alpha corporation financial statement for the year include the following:

Income from continuing operation: 600,000 (+)
Prior Period Adjustment: 200,000 (+)
Cash Dividend Payout: 250,000 (-)
Gain from Discontinue Operation: 500,000 (+)
Extra Ordinary Lost: 100,000 (-)

Based on the above info, what is the net income or net loss for the current year

I have a net income of 950,000 reason (look above to see if I add or sub right)