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Action Company sells bond investments classified as trading securities for $99,000. The face amount is $100,000; unamortized discount is $2,000. What must be included in the journal entry to record the sale?

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madihaalvi27

Answer:

Cash                                        $99,000

Unamortized discount            $2,000

 To Gain on redemption of bond  $1,000

  To bond payable                          $100,000

Explanation:

As the company has sold the bond it has transferred the unamortized loss to profit and loss.

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