A Corporation who ISSUES bonds may \"call\" than in or redeem them prior to matu

Question

A Corporation who ISSUES bonds may "call" than in or redeem them prior to maturity by paying the holder the market value at any time. If they do, the written off and is now no longer a liability (it is "retired") When busing that bond back, the Corporation can have a gain or a loss on that retirement like when we "depose" of an asset. What would be or What would be the Gain or Loss (if any) of the 3 bonds on the first page were "called" "bought" "retired"...at the end of the 10^th year for 101 (INDICATE A LOSS, if any. IN BRACKETS) How much would the asset INVESTMENT account balance be for all of those same 3 purchases????? What would that investor show as annual Income on those same bond purchases??

Explanation / Answer

1.

If the bond is issued at $100 price and retired at $101 price, there is a loss because of higher the retiring price.

The loss for each bond = Issue price – Retiring price

                                    = $100 - $101

                                    = ($1)

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