What amount should be reported as gain on extinguishment

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Reference no: EM132806656

Problem 1: On December 31, 2019, Martin Company reported bonds payable of P7,200,000 and accrued interest payable of P450,000. The face amount of the bonds payable is P7,500,000. The bonds are retired on January 1, 2020 at 88 excluding accrued interest. What amount should be reported as gain or loss on extinguishment?

a. 1,050,000 gain
b. 1,050,000 loss
c, 600,000 gain
d. 600,000 loss

Reference no: EM132806656

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