1. On January 1, 2020, RED Company purchased 12% bonds with face amount of ?5,000,000 for ?5,500,000 which included a transaction cost of ?100,000. The bonds provide an effective yield of 10%. The bonds are dated January 1, 2020, mature on January 1, 2025 and pay interest annually on December 31 of each year. The bonds are quoted at 115 on December 31, 2020. The entity irrevocably elected to use the fair value option. What amount of gain from change in fair value should be reported for 2020?*

? 750,000

? 350,000

? - 0 -

? 250,000

2. On January 1, 2020, RED Company purchased 12% bonds with face amount of ?5,000,000 for ?5,500,000 which included a transaction cost of ?100,000. The bonds provide an effective yield of 10%. The bonds are dated January 1, 2020, mature on January 1, 2025 and pay interest annually on December 31 of each year. The bonds are quoted at 115 on December 31, 2020. The entity irrevocably elected to use the fair value option. What amount of interest income should be reported for 2020?*

? 540,000

? 600,000

? 550,000

? 660,000

3. ORANGE Co. factored ?3,000,000 of accounts receivable without recourse. The factor required an assessment fee of 10% of the accounts factored and a holdback of 15% of the accounts factored for possible sales returns and allowances. The accounts factored had a related allowance for doubtful accounts of ?200,000. What amount of loss on factoring should be recognized?*

? 100,000

? 650,000

? 750,000

? 300,000

4. YELLOW Corporation sold selected merchandise on a consignment basis during 2020. Yellow's accounting records show the following information:*