Pebble Securities is a corporation that buys and sells financial assets. It purchases notes receivable from manufacturers

Question:

Pebble Securities is a corporation that buys and sells financial assets. It purchases notes receivable from manufacturers that need cash immediately and cannot wait to collect the notes. Pebble pays about 88% of the face value of the receivables and then collects them. Because of the quality of the notes, Pebble collected less than it paid for some of the notes. Does Pebble have a capital loss when it collects the receivables for less than it paid for them? Explain.

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...

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