Lea Purchased for $1,310 a $2,000 Bond When It Was

question 94

Multiple Choice

Lea purchased for $1,310 a $2,000 bond when it was issued three years ago.Lea amortized $200 of the original issue discount and then sold the bond for $1,800.Which of the following statements is correct?

• A) Lea has $290 of long-term capital gain.
• B) Lea has $490 of long-term capital gain.
• C) Lea has no capital gain or loss.
• D) Lea has $490 of long-term capital loss.
• E) None of the above.

Understand the definition and role of a merchant as per Article 2 of the UCC.

Identify provisions in Article 2 that exclusively apply to merchants.

Comprehend key concepts in Article 2 including good faith, unconscionability, and expansion of commercial practices.

Distinguish between the common law of contracts and the law of sales under Article 2, focusing on specific areas of distinction.

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Definitions:

Principal

The initial amount of a loan or investment, excluding any interest or dividends.

Agent

An individual or entity authorized to act on behalf of another.

Contract

A legally binding agreement between two or more parties that outlines obligations each party must fulfill.

Liable

Being legally responsible for something, especially in the context of debts or legal wrongs.