Plano Co: How much gain should be reported on the sale of bonds?
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During 2005, Plano Co. purchases 2,000, $1,000, 9% bonds. The carrying value of the bonds at December 31, 2007 was $1,960,000. The bonds mature on March 1, 2012, and pay interest on March 1 and September 1. Plano sells 1,000 bonds on September 1, 2008, for $988,000, after the interest has been received. Plano uses straight-line amortization. The sale on the gain is...?
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Solution Summary
The solution explains how to calculate the gain on sale of bonds for Plano Co.
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The face value of the bonds is 2,000,000 and the carrying value is 1,960,000. The discount on bonds is 40,000 as on Dec 31,2007.
Until Sep ...
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