Answer Happy

Round your answer to the nearest dollar, such as 12345. (No need to write $ as $ is already in front of the box.) (Allowance is set + or - $1.) Use the effective interest rate method. The following information pertains to a bond issue of the VWX Corporation: Maturity value: $1,000,000 Maturity date: December 31, 2023 Stated interest rate (Coupon rate): 5.25% Interest payments are made annually on December 31st Date of issue: January 1, 2016 Effective (market) interest rate (Yield to maturity) at issue: 4.75%
On December 31, 2021, when the market interest rate (=the yield to maturity) of the bond is 4.20%, WWX de- recognized entire bond by paying the market value + $5,000. Determine the amount of the gain or loss on the bond de-recognition. Assume the coupon is paid before the bond de-recognition, and the bond was completely repurchased on 12/31/2021. (If it is a loss, express the amount by a negative number using - sign in front of the amount, such as - 123.) $ $