Daniel purchased a bond on July 1,2016,at par of $10,000 plus accrued interest of $300.On December 31,2016,Daniel collected the $600 interest for the year.On January 1,2017,Daniel sold the bond for $10,200.
A) Daniel must recognize $300 interest income for 2016 and a $200 gain on the sale of the bond in 2017.
B) Daniel must recognize $600 interest income for 2016 and a $200 gain on the sale of the bond in 2017.
C) Daniel must recognize $600 interest income for 2016 and a $100 loss on the sale of the bond in 2017.
D) Daniel must recognize $300 interest income for 2016 and a $100 loss on the sale of the bond in 2017.
E) None of these.
Correct Answer:
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