Assume that Sutcli Company acquires 100 Trout Inc. 10%, semi-annual, 20-year, $1,000 bonds on January 1, 2014, for $106,000, plus brokerage fees of $2,000 as a short-term investment.
Assuming that Sutcli Company receives net proceeds of $103,000 on the sale of Trout Inc. bonds on January 1, 2015, after receiving the interest due, the entry would include:
a. a debit to Loss on Sale of Debt Investments of $3,000.
b. a debit to Loss on Sale of Debt Investments of $5,000.
c. a credit to Gain on Sale of Debt Investments of $3,000.
d. a credit to Gain on Sale of Debt Investments of $5,000.