Answer:
$25,800
Step-by-step explanation:
The bonds would mature at the end of the year 2028, which means in 2 years, as result, annual discount amortization is computed thus:
annual discount amortization=$50,000/2=$25,000
On January 1,2028, the balance in discount amortization is $25,000
Proceeds for 60% redemption=$600,000*60%*103%=$370,800
60% of bonds payable=$600,000*60%=$360,000
60% of unamortized discount=60%*$25,000=$15,000
In effecting the journal entries, bonds payable is debited with $360,000 while cash and discount on bonds payable are credited with $370,800 and $15,000 respectively.
Total credits=$370,800+$15,000=$385,800
total debit=$360,000
loss on early extinguishment is $25,800($385,800-$360,000)