If a bond is sold at a price which is greater than the amortized cost of the bond
A) a loss is reported in balance sheet.
B) a gain is reported in balance sheet.
C) a gain is reported on the income statement.
D) a loss is reported on the income statement.

Question

Quizplus · Accepted Answer

When a bond is sold at a price greater than its amortized cost, the difference is recognized as a gain on the income statement, reflecting the positive difference between the sale price and the book value of the bond.

If a Bond Is Sold at a Price Which Is