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Where should amc report any gain or loss on this transaction

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AMC Entertainment, Inc., owns and operates movie theaters worldwide. Assume the company issued 4 percent bonds at their $ 53,000,000 face value and then used all of these cash proceeds to retire bonds with a stated interest rate of 6 percent. At that time, the 6 percent bonds had a carrying value of $ 50,000,000.

 Required:

1. Prepare the journal entries to record the issuance of the 4 percent bonds and the early retirement of the 6 percent bonds. Assume both sets of bonds were issued at face value. 

2. Where should AMC report any gain or loss on this transaction? 

3. What dollar amount of interest expense is AMC saving each year by replacing the 6 percent bonds with the 4 percent bonds?

Reference no: EM13867344

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