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  3. 12 company purchased $100,000, 6% bonds of another

12 Company purchased $100,000, 6% bonds of Another Company at face value on January 1,...

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Accounting

12 Company purchased $100,000, 6% bonds of Another Company at face value on January 1, Year 1 as an investment. The bonds pay interest on July 1 and January 1 and mature on January 1, Year 21. Company does not intend to hold the bonds until they mature but does not plan to actively trade the bonds. On December 31, Year 1, the bonds had a fair value of $90,000.

Determine the amount that pretax income would increase (decrease) as a result of the investment for Year 1.

Note: Give your answer using dollar signs and commas but no decimal points (cents). Example: $12,345 or $(12,345)

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