Cedar Co Purchased 80, 6% LKN Company Bonds for $80,000 Cash

Multiple Choice

Cedar Co. purchased 80, 6% LKN Company bonds for $80,000 cash. Interest is payable annually on January 1. If 40 of the securities are sold January 1 for $41,000 the entry would include a credit to Gain on Sale of Debt Investments of

A) $500.
B) $1,200.
C) $5,400.
D) $1,000.