Jason Owns Blue Corporation Bonds (Face Value of $10,000), Purchased

question 33

Multiple Choice

Jason owns Blue Corporation bonds (face value of $10,000) , purchased on January 1, 2014, for $11,000. The bonds have an annual interest rate of 8% and a maturity date of December 31, 2023. If Jason elects to amortize the bond premium, what is his taxable interest income for 2014 and the adjusted basis for the bonds at the end of 2014 (assuming straight-line amortization is appropriate) ?

• A) $800 and $11,000.
• B) $800 and $10,900.
• C) $700 and $11,000.
• D)
• $700 and $10,900.
• E) None of the above.

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Definitions:

Peripheral Nervous System

The part of the nervous system outside the brain and spinal cord, responsible for connecting the central nervous system to limbs and organs.

Somatic Nervous System

Part of the peripheral nervous system that is responsible for carrying sensory and motor information to and from the central nervous system.

Movement

The act or process of moving; a change of place or position, often referring to physical activity or migration.

Spinal Cord

The spinal cord is a long, thin, tubular structure made up of nervous tissue that extends from the medulla oblongata in the brainstem to the lumbar region of the vertebral column.