Question

On January 12, 2021, Jefferson Corporation purchased bonds of Rose Corporation for $75 million at par and classified the securities as available-for-sale. On December 31, 2021, these bonds were valued at $68 million. Nine months later, on October 3, 2022, Jefferson Corporation sold these bonds for $86 million. As part of the multistep approach to record the 2022 transaction, Jefferson Corporation should next take the second step of:

Answer 1

$11 million gain

Step-by-step explanation:

As part of the multi step approach to record the 2022 transaction, Jefferson Corporation should next take the second step of: Recording a sales transaction with a gain of the amount of $11 million which is Calculated as:

Gain= Bonds purchased $75 million at par - Bonds sold $86 million

Gain=$11 million