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Card Corp. purchased bonds at a discount of $49,000. The bonds were classified as available for sale. Subsequently, Card sold these bonds at a premium of $12,000. During the period that Card held this investment, amortization of the discount amounted to $19,000. What amount should Card report as gain on the sale of bonds?

Respuesta :

Karabo99

Answer:

The amount that the card should report as gain on sale of bonds  $42000.

Explanation:

carrying cost = 49000 - 19000= 30000

amount should card report as gain on sale of bond = cost of bond + premium price - (cost - carrying value cost )

amount card report as gain =  49000 + 12000 - ( 49000 - 30000)

                                              = 42000  

Therefore, the amount that the card should report as gain on sale of bonds  $42000.

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