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Cortez Company issues $3,000,000 face value of bonds at 96 on January 1, 2011. The bonds are dated January 1, 2011, pay interest semiannually at 8% on June 30 and December 31, and mature in 10 years. Straight-line amortization is used for discounts and premiums. On September 1, 2014, $1,800,000 of the bonds are called at 102 plus accrued interest. What gain or loss would be recognized on the called bonds on September 1, 2014?

A) $180,000 loss

B) $81,600 loss

C) $136,000 loss

D) $108,000 loss

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M965801

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