In December of This Year,Jake and Stockard,a Married Couple,redeemed Qualified

question 31

Multiple Choice

In December of this year,Jake and Stockard,a married couple,redeemed qualified Series EE U.S.Savings Bonds which they had purchased in January 2003.The proceeds were used to help pay for their daughter's college tuition.Jake and Stockard received proceeds of $8,000 representing principal of $5,000 and interest of $3,000.The qualified higher educational expenses they paid this year totaled $6,000. Their AGI is below the threshold for phase-out of the exclusion.What is the amount of interest income Jake and Stockard can exclude from their income this year?

• A)$2,250
• B)$2,500
• C)$3,000
• D)$5,000

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Definitions:

Loan Request

A formal application to a lender asking for funds to be borrowed under specified terms.

Classified Balance Sheet

A financial statement that groups assets, liabilities, and equity into subcategories, providing detail and clarity to financial positions.

Adjusted Trial Balance

A list of all ledger accounts and their final balances after adjustments have been made, used as the basis for preparing financial statements.

End-Of-Period Spreadsheet

A tool used in accounting to compile all account balances at the period's end, aiding in the preparation of financial statements.