Asked by Peter Manyang Bichok on May 06, 2024
Verified
When debt investments are sold the gain or loss is the difference between the net proceeds from the sale and the fair value of the bonds.
Net Proceeds
The amount of money received from a sale after subtracting all related expenses and costs.
Fair Value
Amount for which a security could be sold in a normal market.
Debt Investments
Investments in government and corporation bonds.
- Grasp the criteria for recognizing earnings and losses from investments.
Verified Answer
AA
Amanowil AbadirMay 11, 2024
Final Answer :
False
Explanation :
The gain or loss on the sale of debt investments is the difference between the net proceeds from the sale and the carrying amount (book value) of the debt investment, not the fair value.
Learning Objectives
- Grasp the criteria for recognizing earnings and losses from investments.