On January 1, 2016, Swen paid $184,000 for $200,000 of the 8%, 20-year bonds of Penn Corporation,

Question:

On January 1, 2016, Swen paid $184,000 for $200,000 of the 8%, 20-year bonds of Penn Corporation, issued on January 1, 2012, at par. The bonds are held as an investment. Determine the gain and the character of the gain if the bonds are sold on January 1, 2018, for

a. $191,000

b. $185,750

c. $183,000

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