Question: On June 1, 2012, Chloe Inc. purchased as a long-term investment 800 of the $1,000 face value, 9% bonds of Logan Corporation for $731,052. The

On June 1, 2012, Chloe Inc. purchased as a long-term investment 800 of the $1,000 face value, 9% bonds of Logan for $731,052. The bonds were purchased to yield 11% interest. Interest is payable semiannually on December 1 and June 1. The bonds mature on June 1, 2018. Chloe uses the effective-interest method of amortization. On November 1, 2013, Chloe sold the bonds for $756,400. This amount includes the appropriate accrued interest. Chloe intended to hold these bonds until they matured, so year-to-year market value fluctuations were ignored in accounting for the bonds. Instructions: Prepare a schedule showing the income or loss before income taxes from the bond investment that Chloe should record for the years ended December 31, 2012, and 2013.

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