Use the following information for questions 11 and 12 on the following page.
Djokovic Co. purchased €300,000 of 8%, 5-year bonds from Carlin, Inc. on January 1, 2021, with interest payable on July 1 and January 1. The bonds sold for €312,474 at an effective interest rate of 7%. Using the effective interest method, Djokovic Co. decreased the non-trading Deb Investments account for the Carlin, Inc. bonds on July 1, 2021 and December 31, 2021 by the amortized premiums of €1,062 and €1,098, respectively.
11. At December 31, 2021, the fair value of the Carlin, Inc, bonds was e318,000, What should Djokovic Co. report as other comprehensive income and as a separate component of equity?
a. eo
b. €2,160
c. €5,526
d. €7,686
12. At February 1, 2022, Djokovic Co. sold the Carlin bonds for €309,000. After accruing for interest, the carrying value of the Carlin bonds on February 1, 2022 was €310,125. Assura Djokovic Co. has a portfolio of non-trading debt securities, what should Djokovic Co. report as a gain (or loss) on the bonds?
a. €0.
b. (€1,125).
c. (€6,561).
d. (€8,811).