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Compute the gain or loss on early extinguishment of debt

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Question - Baker, Inc. issued $1,600,000 of 6%, $1,000 par callable bonds on December 31, 2019, with a carrying value of $1,700,000. Baker calls the bonds on January 2, 2020. The call price is 103. Compute the gain or loss on early extinguishment of debt.

a. loss of $48,000

b. no gain or loss

c. gain of $52,000

d. loss of $100,000

e. None of these is correct.

Reference no: EM132531653

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