Question

Dim Corporation purchased 1,000 bonds of Witt Corporation in 2015 for $790 per bond and classified the investment as securities available for sale. The value of these holdings was $272 per bond on December 31, 2016, and $404 on December 31, 2017. During 2018, Dim sold all of its Witt bonds at $490 per share. In its 2018 income statement, Dim would report:

Answer 1

Answer:

In the income statemnt for 2018

Gain on Sale of Bonds 86,000

Explanation:

This securities available for sale will be measurement at fair value, through profit and loss

2018 Beginning Valuation

1,000 bonds x 404 = 404,000

Value at sale

1,0000 x 490 = 490,000

Gain on Sale of Bonds 86,000