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On January 1, 2020, Addison Company purchased $3,00,000 of 5-year bonds with a stated rate of interest of 8% from Charter, In
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The unrealized gain or loss on the available for sale investment is transferred to the other comprehensive income. When the investments are sold then the net gain or loss is recognized in the income statement. Until then the unrealized gain or loss at the end of each reporting period will be shown under other comprehensive income. OCI is shown in the income statement after the calculation of the net income.

In the given question the investment are classified as available for sale investment and purchased at $3124740.The value at the end of the period is $3180000. The unrealised gain which is the difference of these will be shown under other comprehensive income. So the amount is $55260.

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