On January 1, 2016, Sunland Company issued 4100 of its 10%, $1,000 bonds for $4264000....
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On January 1, 2016, Sunland Company issued 4100 of its 10%, $1,000 bonds for $4264000. These bonds were to mature on January 1, 2026 but were callable at 101 any time after December 31, 2019. Interest was payable semiannually on July 1 and January 1. On July 1, 2021, Sunland called all of the bonds and retired them. Bond premium was amortized on a straight-line basis. Before income taxes, Sunland's gain or loss in 2021 on this early extinguishment of debt was
$49200 gain.
$32800 gain.
$41000 loss.
$123000 gain.
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