What is the loss that Jacobs should record

Reference no: EM132722657

Question - The 10% bonds payable of Jacobs Company had a net carrying amount of $1,140,000 on December 31, 2004. The bonds, which had a face value of $1,200,000, were issued at a discount to yield 12%. The amortization of the bond discount was recorded under the effective interest method. Interest was paid on January 1 and July 1 of each year. On July 2, 2005, several years before their maturity, Jacobs retired the bonds at 102. The interest payment on July 1, 2005 was made as scheduled. What is the loss that Jacobs should record on the early retirement of the bonds on July 2, 2005? Ignore taxes.

Reference no: EM132722657

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