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Fargo Industries issued $1 million in 8%, 10-year bonds on Jan 1, 2019, when the...

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Accounting

Fargo Industries issued $1 million in 8%, 10-year bonds on Jan 1, 2019, when the market rate for similar bonds was 10%. The bonds pay interest semi-annually on July 1, and Dec 31. At 12/31/2021, when the market rate for similar bonds is 6%, Fargo considers whether to retire the bonds and reissue them at 6%.

The early retirement of the bonds would result in an accounting:

A) Gain

B) Loss

What is the gain/loss?

The early retirement of the bonds would result in an economic:

A) Gain

B) Loss

What is the gain/loss?

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