Required information Learning Objective 12-02 Demonstrate how to identify and account for debt investments classified for reporting purposes as held-to-maturity. [The following information applies to the questions displayed below.] If an investor has the positive intent and ability to hold the securities to maturity, investments in debt securities are classified as HTM and reported at amortized cost in the balance sheet. These investments are recorded at cost, and holding gains or losses from fair value changes are ignored. Debt Investments to Be Held to Maturity (HTM) Knowledge Check 01 On January 1, Year 1, Broglie Company purchased $922,000 of bonds issued by Caro Company at face value. Broglie had the positive intent and ability to hold debt securities to maturity. On December 31, Year 1, those bonds had a fair value of \$950,000. That change in fair value was deemed to be temporary. Due to a change in circumstances, Broglie sold those bonds for $976,000 on March 1 , Year 2 . What is the amount of the gain that will be reported in net income for Year 2