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  1. business
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  3. on july 1, year 1, test company purchased $100,000

On July 1, Year 1, Test Company purchased $100,000,5% A Company bonds for $100,000. The...

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Accounting

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On July 1, Year 1, Test Company purchased $100,000,5% A Company bonds for $100,000. The bonds pay interest on July 1 and January 1 . Test Company management has the positive intent and ability to hold the bonds antil they mature. The fair value of the bonds on December 31 , Year 1 was $105,000. On January 1, Year 2, Test Company sold all of the bonds for $105,000. Assume that Tests Company held no other investments during Year 1 or Year 2. Determine the amount that pretax income would increase (decrease) in Year 2 as a result of the investment. Give your answer using dollar signs and commas but not decimals (cents). Example: $12,345 or $(12,345)

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