Ask Question
16 June, 09:53

Jent Corp. purchased bonds at a discount of $10,000. Subsequently, Jent sold these bonds at a premium of $14,000. During the period that Jent held this investment, amortization of the discount amounted to $2,000. What amount should Jent report as gain on the sale of bonds? A. $12,000B. $22,000C. $24,000D. $26,000

+4
Answers (1)
  1. 16 June, 13:26
    0
    Answer: Amount should Jent report as gain on the sale of bonds : $22000

    Explanation:

    Given:

    Bonds purchased at a discount of $10,000

    Bonds sold at a premium of $14,000

    Amortization of the discount amounted to $2,000.

    Therefore, gain on the sale of bonds can be computed as:

    Gains = (Cost + Premium) - (Cost - Carrying Cost)

    ∵ Carrying Cost = Purchasing Cost - Amortization

    Carrying Cost = 10000 - 2000

    Carrying Cost = $8000

    ∴ Gains = (10000 + 14000) - (10000 - 8000)

    Gains = $22000
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Jent Corp. purchased bonds at a discount of $10,000. Subsequently, Jent sold these bonds at a premium of $14,000. During the period that ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers