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How much is the gain on reclassification on january

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Problem 1: On January 1, 20x1, Dagul Co. acquired 10%, ?4,000,000 bonds for ?3,807,853. The principal is  due on January 1, 20x4 but interest is due annually starting December 31, 20x1. The yield rate on  the bonds is 12%. On July, 1 20x1, Dagul Co. changed its business model. It was ascertained that  the investment in bonds at amortized cost should be reclassified to held for trading securities on  reclassification date. The bonds were quoted at 102, 103 and 104 on July 1, 20x1, December 31,  20x1 and January 1, 20x2, respectively. How much is the gain (loss) on reclassification on January 1, 20x2?

a. 243,676               c. 295,205
b. 255,205                d. 0

Reference no: EM132788432

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