On July 1, Year 1, Test Company purchased $50,000,4% A Company bonds for $50,000. The...
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Accounting
On July 1, Year 1, Test Company purchased $50,000,4% A Company bonds for $50,000. The bonds pay interest on July 1 and January 1 . Test Company management does not plan to actively trade the bonds but does not plan to hold the bonds until they mature. The fair value of the bonds on December 31, Year 1 was $55,000. On January 1, Year 2, Test Company sold all of the bonds for $55,000. Assume that Tests Company held no other investments during Year 1 or Year 2. Determine the amount that pretax income would increase (decrease) in Year 2 as a result of the investment. Give your answer using dollar signs and commas but not decimals (cents). Example: $12,345 or $(12,345)
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