ABC, a holder of a $400,000 XYZ Inc. bond, collected the interest due on June 30, 20X8, and then sold the bond to DEF Inc. for $365,000. On that date the bond issuer, XYZ, a 90 percent owner of DEF, had a $450,000 carrying amount for this bond.
Based on the information given above, what amount of gain or loss on bond retirement was recorded?
A) No gain or loss
B) $85,000 gain
C) $85,000 loss
D) $35,000 loss

Question

Quizplus · Accepted Answer

The Answer of ABC, a holder of a $400,000 XYZ Inc. bond, collected the interest due on June 30, 20X8, and then sold the bond to DEF Inc. for $365,000. On that date the bond issuer, XYZ, a 90 percent owner of DEF, had a $450,000 carrying amount for this bond.
Based on the information given above, what amount of gain or loss on bond retirement was recorded?
A) No gain or loss
B) $85,000 gain
C) $85,000 loss
D) $35,000 loss

ABC, a Holder of a $400,000 XYZ Inc