On June 30, 2010, Parks Co. had outstanding 8%, $2,000,000 face amount, 15-year bonds maturing on June 30, 2025. Interest is payable on June 30 and…

1.On June 30, 2010, Parks Co. had outstanding 8%, $2,000,000 face amount, 15-year bonds maturing on June 30, 2025. Interest is payable on June 30 and December 31. The unamortized balances in the bond discount and deferred bond issue costs accounts on June 30, 2010 were $70,000 and $20,000, respectively. On June 30, 2010, Parks acquired all of these bonds at 94 and retired them. What net carrying amount should be used in computing gain or loss on this early extinguishment of debt?Answer$1,980,000.$1,930,000.$1,910,000.$1,880,000. 2.The 12% bonds payable of Lynn Co. had a carrying amount of $936,000 on December 31, 2004. The bonds, which had a face value of $900,000, were issued at a premium to yield 10%. Lynn uses the effective interest method of amortization. Interest is paid on June 30 and December 31. On July 1, 2005, several years before their maturity and after Lynn made the interest payment for June 30, 2005, Lynn retired the bonds at 104. The loss on retirement, ignoring taxes, isAnswer$0.$7,200.$11,160.$36,000.

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