Capital gain from bond purchasing
Not what you're looking for?
Rica purchased for $4,500 a $5,000 bond when it was issued two years ago. Rica amortized $250 of the original issue discount and then sold the bond for $4,875. Which of the following statements is correct?
a. Rica has $125 of long-term capital gain.
b. Rica has $250 of long-term capital gain.
c. Rica has $375 of long-term capital gain.
d. Rica has $125 long-term capital loss.
e. None of the above.
Purchase this Solution
Solution Summary
This solution is comprised of a detailed explanation to answer the capital gain from bond purchasing.
Solution Preview
Answer: C
A capital gain is the difference between what you ...
Purchase this Solution
Free BrainMass Quizzes
Introduction to Finance
This quiz test introductory finance topics.
Operations Management
This quiz tests a student's knowledge about Operations Management
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.