Daniel purchased a bond on July 1,2011,at par of $10,000 plus accrued interest of $300.On December 31,2011,Daniel collected the $600 interest for the year.On January 1,2012,Daniel sold the bond for $10,200.

Question

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Daniel must recognize $300 interest income for 2011 and a $200 gain on the sale of the bond in 2012 because he purchased the bond at par and sold it for $10,200, which is $200 more than the purchase price.

Daniel Purchased a Bond on July 1,2011,at Par of $10,000