Mazzeo Company acquires 80 Dodd's 10%, 5 year, $1,000 bonds on January 1, 2014 for $80,000. If Mazzeo sells all of its Dodd's Bonds for $78,400 what gain or loss is recognized?

Question

Quizplus · Accepted Answer

Mazzeo Company purchased the bonds for $80,000 and sold them for $78,400. The loss recognized is the difference between the purchase price and the selling price, which is $80,000 - $78,400 = $1,600.

Mazzeo Company Acquires 80 Dodd's 10%, 5 Year, $1,000 Bonds