At February 1, 2015, Richman Company sold the Carlin bonds for $927,000. After accruing for interest, the carrying value of the Carlin bonds on February 1, 2015 was $930,375. Assuming Richman Company has a portfolio of available-for-sale debt investments, what should Richman Company report as a gain (or loss) on the bonds?

Question

Quizplus · Accepted Answer

The gain or loss on available-for-sale debt investments is calculated as the difference between the selling price and the carrying value. In this case, the selling price is $927,000 and the carrying value is $930,375, resulting in a loss of $3,375.

At February 1, 2015, Richman Company Sold the Carlin Bonds