Question

Stamford Co. purchased a bond on October 4 of the current year for $ 30 comma 000 and classified it as​ available-for-sale. The market value of the investment at​ year-end is $ 29 comma 000. What value will be reported in net income for the​ adjustment, if​ any? A. $ 29 comma 000 B. $( 1 comma 000 ) C. ​$0 D. Not enough information is given to determine the amount included in net income.

Answer 1

Answer:

C. ​$0

Explanation:

Data provided in the question

Purchase value of the bond = $30,000

And, the market value of the investment at the ending year is $29,000

So by considering the above information, the $0 would be reported in the net income as only realized gains are transferred to the income statement

While the unrealized gain or loss on available for sale securities transferred to Comprehensive income statement and accumulated amount goes to Balance Sheet as  a Accumulated Other Comprehensive Income