What pharoah company report as other comprehensive income

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Question - Pharoah Company purchased $1120000 of 8%, 5-year bonds from Sheridan, Inc. on January 1, 2021, with interest payable on July 1 and January 1. The bonds sold for $1169896 at an effective interest rate of 7%. Using the effective interest method, Pharoah Company decreased the Available-for-Sale Debt Securities account for the Sheridan, Inc. bonds on July 1, 2021 and December 31, 2021 by the amortized premiums of $3448 and $3592, respectively.

At December 31, 2021, the fair value of the Sheridan, Inc. bonds was $1200000. What should Pharoah Company report as other comprehensive income and as a separate component of stockholders' equity?

Reference no: EM132922124

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