Use the Present Value and Future Value Tables Included in Appendix

Use the present value and future value tables included in Appendix 8 and on the textbook companion website.
-Smith Corporation issued a $100,000, 10-year, 10 percent bond on January 1, 2010, for $112,000. Smith uses the straight-line method of amortization. On April 1, 2013, Smith reacquired the bonds for retirement when they were selling at 102 on the open market. Assuming no call premiums, how much gain or loss should Smith recognize on the retirement of the bonds?

A) $2,000 loss
B) $3,900 gain
C) $6,100 gain
D) $8,200 loss

Correct Answer:

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