CHAPTER 12 (3.)

S&L Financial buys and sells securities which it classifies as available-for-sale. On December 27, 2018, S&L purchased Coca-Cola bonds at par for $715,000 and sold the bonds on January 3, 2019, for $717,500. At December 31, the bonds had a fair value of $713,500, and S&L has the intent and ability to hold the investment until fair value recovers. What pretax amounts did S&L include in its 2018 and 2019 net income as a result of this investment?

BELOW IS THE PICTURE OF THE ANSWER I GOT WRONG.

Answer is complete but not entirely correct. 2018 2019 No gain/loss in earnings Gain Pretax amount $ 0 $ 1,500