Question
On Jan 1, 2021, FMT purchased 1,000 shares of the following bonds. Face value per share: $100 and thus the total face value of the
On Jan 1, 2021, FMT purchased 1,000 shares of the following bonds. Face value per share: $100 and thus the total face value of the investment is $100,000. Payment frequency is semi-annual (june 30 and december 31) at the coupon rate of 8%. The bonds' maturity is in five years on Dec 31, 2025.
On the purchase day, the yield (market rate) was 9%. The market prices per share for the bonds on the last trading day of 2021 was $90. On july 1, 2022 FMT sold all shares of the bonds at $102 per share.
Assume that FTM classified the bonds as held-to maturity securities. What is the bonds' effect on net income in 2021 and 2022 respectively?
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Taxation Of Individuals And Business Entities 2015
Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver
6th Edition
9780077862367
