Card Corp. purchased bonds at a discount of $49,000. The bonds were classified as available for sale. Subsequently, Card sold these bonds at a premium of $12,000. During the period that Card held this investment, amortization of the discount amounted to $19,000. What amount should Card report as gain on the sale of bonds?

Question

Business

Guest

8 July, 14:58

Card Corp. purchased bonds at a discount of $49,000. The bonds were classified as available for sale. Subsequently, Card sold these bonds at a premium of $12,000. During the period that Card held this investment, amortization of the discount amounted to $19,000. What amount should Card report as gain on the sale of bonds?

+2

Answers (1)

Know the Answer?

Nibbles · Answer 1

The amount that the card should report as gain on sale of bonds $42000.

Explanation:

carrying cost = 49000 - 19000 = 30000

amount should card report as gain on sale of bond = cost of bond + premium price - (cost - carrying value cost)

amount card report as gain = 49000 + 12000 - (49000 - 30000)

= 42000

Therefore, the amount that the card should report as gain on sale of bonds $42000.