Penta Company purchased 1,000 bonds of Gone Company in 2018 for $810 per bond and classified the investment as securities available-for-sale. The value of these holdings was $272 per bond on December 31, 2019, and $421 per bond on December 31, 2020. During 2021, Penta sold all of its Gone bonds at $390 per bond. In its 2021 income statement, Penta would report: Multiple Choice A trading gain of $31,000 and an unrealized holding loss of $390,00O. A loss on the sale of investments of $420,000. A realized gain of $31,00O. A recognition of unrealized holding losses of $272,000.

Penta Company purchased 1,000 bonds of Gone Company in 2018 for $810 per bond and classified the investment as securities available-for-sale. The value of these holdings was $272 per bond on December 31, 2019, and $421 per bond on December 31, 2020. During 2021, Penta sold all of its Gone bonds at $390 per bond. In its 2021 income statement, Penta would report: Multiple Choice A trading gain of $31,000 and an unrealized holding loss of $390,00O. A loss on the sale of investments of $420,000. A realized gain of $31,00O. A recognition of unrealized holding losses of $272,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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