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Scott Corporation Issued $1,000,000, 8% Bonds, Receiving a $30,000 Premium

Question 59

Multiple Choice

Scott Corporation issued $1,000,000, 8% bonds, receiving a $30,000 premium. On the interest payment date 5 years later, after the bond interest was paid and after 40% of the premium had been amortized, the corporation purchased the entire issue on the openmarket at 95 and retired the issue. As a result, the gain on retirement was:


A) $18,000.
B) $12,000.
C) $13,000.
D) $130,000.
E) $68,000.

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