Assume that DELFT Inc. purchases a $1,000,2%, fair-market value investment on 3/1/20 with a $40,000, 6%, 2-year N/P (principal and interest all paid at the end of year 2) and plans to hold the investment for four years. During the year, DELFT receives $20 of cash interest from the investment and at the end of the year, the investment is listed on the NASDAQ at $1,600. The additional $39,000 from the note is placed in Delft's bank account.

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