Barr Company acquires 60, 10%, 5 year $1,000 Community bonds on January 1, 2010 for $61,250. This

Question:

Barr Company acquires 60, 10%, 5 year $1,000 Community bonds on January 1, 2010 for $61,250. This includes a brokerage commission of $1,250. If Barr sells all of its Community bonds for $62,500 and pays $1,500 in brokerage commissions, what gain or loss is recognized?
a. Gain of $2,500
b. Loss of $250
c. Gain of $250
d. Gain of $1,250
A bond is non-current liability. The interest paid on bond determined by bond’s along with its rate or contract rate. Sometimes bonds sell at below than called at a discount or sell at above the called at a premium. The bond discounts or a premium means it reflects the adjustment of the bond price yield the required rate of return of market. To compete with new issues bonds sell at a premium rate or discount rate.

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...