On January 2,2019, Silver Company invested in a 4-year 10% bond with a face value of $3,000,000 in which interest is to be paid every December 31. The bonds have an effective interest rate of 8% and was acquired for $3,198,650. Silver Company classified the bonds as investment at amortized cost. On December 31, 2021, Silver Company sold the bonds at the prevailing rate of 12% and incurred total transaction cost of $45,000. What amount of gain or loss should Silver Company recognize on the sale of the security?
On January 2,2019, Silver Company invested in a 4-year 10% bond with a face value of $3,000,000 in which interest is to be paid every December 31. The bonds have an effective interest rate of 8% and was acquired for $3,198,650. Silver Company classified the bonds as investment at amortized cost. On December 31, 2021, Silver Company sold the bonds at the prevailing rate of 12% and incurred total transaction cost of $45,000. What amount of gain or loss should Silver Company recognize on the sale of the security?
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 14MC: Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the...
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On January 2,2019, Silver Company invested in a 4-year 10% bond with a face value of $3,000,000 in which interest is to be paid every December 31. The bonds have an effective interest rate of 8% and was acquired for $3,198,650. Silver Company classified the bonds as investment at amortized cost. On December 31, 2021, Silver Company sold the bonds at the prevailing rate of 12% and incurred total transaction cost of $45,000.
What amount of gain or loss should Silver Company recognize on the sale of the security?
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