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Sheila purchases $184,000 of newly issued Gingo Corporation bonds for $165,600. The bonds have original issue discount (OID) of $18,400. After Sheila amortized $8,280 of OID and held the bonds for four years, she sold the bonds for $174,800. What is the amount and character of her gain or loss

Respuesta :

Answer:

the gain on the sale of land is $920

Explanation:

The calculation of the amount and character of her gain or loss is given below

The adjusted basis is

= Issued price + amortized discount

= $165,600 + $8,280

= $173,880

Now the gain on sale is

= Sale price - adjusted basis

= $174,800 - $173,880

= $920

Hence, the gain on the sale of land is $920

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