Question
Please help me solve this problem. On July 1, 2019, Daphnes Delights Inc. purchased a 3-year, $75,000 face value bond with a June 30, 2022,
Please help me solve this problem.
On July 1, 2019, Daphnes Delights Inc. purchased a 3-year, $75,000 face value bond with a June 30, 2022, maturity date. The bonds stated rate of interest was 5%, paid semiannually (June 30 and December 31). The bond was properly reported as a trading security.
The fair value of the bond purchased by Daphnes was $73,500 on December 31, 2019.
What was the net dollar impact of any and all bond related entries on 2019 income before income taxes?
Group of answer choices
$ 375 increase
$3,375 increase
$2,250 increase
$2,250 decrease
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