Postage,a Holder of a $400,000 Stamp Inc

question 23

Multiple Choice

Postage,a holder of a $400,000 Stamp Inc.bond,collected the interest due on June 30,20X8,and then sold the bond to DEF Inc.for $365,000.On that date the bond issuer,Stamp,a 90 percent owner of DEF,had a $450,000 carrying amount for this bond.
-Based on the information given above,what amount of gain or loss on bond retirement was recorded?

• A)No gain or loss
• B)$85,000 gain
• C)$85,000 loss
• D)$35,000 loss

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Definitions:

Good Faith

The honest intent to act without taking an unfair advantage over another party in a contractual or negotiation context.

Unconscionable Clauses

Terms in a contract that are deemed so unfair or oppressive that they are unenforceable under law.

Personal Property

Movable items belonging to an individual or entity, as opposed to real estate or real property, including vehicles, furniture, and personal belongings.

Code

Code refers to a systematic collection, compilation, or body of laws, rules, or regulations.