Question: Mr. Small expects that interest rates will fall over the next 2 years and therefore the bond will increase in value. If this happens, in

Mr. Small expects that interest rates will fall over the next 2 years and therefore the bond will increase in value. If this happens, in a year or two he will sell the bond for a gain when its price has increased. However, if the bond price does not increase Mr. Small will hold the bond in Tiny Co's portfolio and continue to receive and record the interest payments. Given this information, how do you think this bond should be classified in Tiny Co's financial statements?

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