On July 1, 2019, Aldrich Company purchased as an available-for-sale security $200,000 face value, 9% U.S. Treasury
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On July 1, 2019, Aldrich Company purchased as an available-for-sale security $200,000 face value, 9% U.S. Treasury notes for $194,000.
The notes mature July 1, 2020, and pay interest semiannually on January 1 and July 1. The notes were sold on December 1, 2019, for $199,000.
Aldrich normally uses straight-line amortization on all of its notes. In its income statement for the year ended December 31, 2019, what amount should Aldrich report as a gain on the sale of the available-for-sale security?
a. $2,500
b. $3,500
c. $5,000
d. $6,000
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Related Book For 
Intermediate Accounting Reporting and Analysis
ISBN: 978-1337788281
3rd edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach
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