Athenaeum of Ohio Accrued Market Discount and Investment Problem Solving

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wnmbayv

Business Finance

Description

on 1/1/01 investor A purchases a debt instrument with face value of $100,000 for $90,000. On6/30/02 A sells the investment for $96,000. Accrued market discount for the 18 months the investment was held is $1500. How much income does A recognize in'01 in connection with this investment? Assume no special elections have been made.

How much interest income does A recognize in 02?

How much capital gain does A recognize in '02?

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Explanation & Answer

How much capital gain does A recognize in '02?Purchase price ...

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