Benny purchased $400,000 of Peach Corporation face value bonds for $320,000 on November 13, 2018. The bonds

Question:

Benny purchased $400,000 of Peach Corporation face value bonds for $320,000 on November 13, 2018. The bonds had been issued with $80,000 of original issue discount because Peach was in financial difficulty in 2018. On December 3, 2019, Benny sold the bonds for $283,000 after amortizing $1,000 of the original issue discount. What are the nature and amount of Benny’s gain or loss?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...

Fantastic news! We've Found the answer you've been seeking!