Darouich Industries Decided to Retire an $80,000,000 Bond Issue Before

Darouich Industries decided to retire an $80,000,000 bond issue before its due date.The bonds were callable by the company at 102.At the same time,the bonds were selling at 101 on the open market.The company was able to buy $40,000,00 of the bonds at 101 and called the remaining bonds.At that time,there was $3,000,000 in the Bond Discount account and $5,000,000 in the Unamortized Bond Issue Costs accounts.Compute the gain or loss on the early extinguishment of the bonds.

A) $4,200,000 gain
B) $6,200,000 loss
C) $9,200,000 gain
D) $9,200,000 loss

Correct Answer:

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