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What the company will recognize as a result of the sale

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Problem 1: Suppose that on February 28, 2021, the market value of the bonds was $ 103,500. The company sold the bonds for that amount on March 1, 2021. Prior to the sale, the amortized cost was adjusted to $ 96,900. On the aforementioned date, the company will recognize as a result of the sale:

a. A realized gain of $ 6,600 on the Income and Expense Statement.

b. A realized gain of $ 1,100 on the Income and Expense Statement.

c. An unrealized gain of $ 1,100 and a realized gain of $ 5,500 on the Income and Expense Statement.

d. A realized gain on the sale of $ 1,100 and a reclassification from AOCI to the Statement of Income and Expenses for $ 5,500.

Reference no: EM132744765

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