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Ivanhoe Company purchased $1220000 of 8%, 5-year bonds from Carlin, Inc. on January 1, 2021, with interest payable on July 1 and January 1.
Ivanhoe Company purchased $1220000 of 8%, 5-year bonds from Carlin, Inc. on January 1, 2021, with interest payable on July 1 and January 1. The bonds sold for $1269696 at an effective interest rate of 7%. Using the effective interest method, Ivanhoe Company decreased the Available-for-Sale Debt Securities account for the Carlin, Inc. bonds on July 1, 2021 and December 31, 2021 by the amortized premiums of $4448 and $4592, respectively. At February 1, 2022, Ivanhoe Company sold the Carlin bonds for $1256200. After accruing for interest, the carrying value of the Carlin bonds on February 1, 2022 was $1260500. Assuming Ivanhoe Company has a portfolio of available-for-sale debt investments, what should Ivanhoe Company report as a gain (or loss) on the bonds? O $-13496. O $-9196. O $-4300. O $0.
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