company abc sells loans with a 2 200 fair value and a carrying amount of 2 000 abc c 604414

Items 1 through 3 are based on the following:

Company ABC sells loans with a $2,200 fair value and a carrying amount of $2,000. ABC Company obtains an option to purchase similar loans and assumes a recourse obligation to repurchase loans. ABC Company also agrees to provide a floating rate of interest to the transferee company. The fair values are listed.

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Fair values
Cash proceeds	$2,100
Interest rate swap	140
Call option	80
Recourse obligation	(120)

What is the gain (loss) on the sale?

1. $ 320
2. $ 200
3. $(100)
4. $ 120

The journal entry to record the transfer for ABC Company includes

1. A debit to call option.
2. A credit to interest rate swap.
3. A debit to loans.
4. A credit to cash.

Assume for this problem that ABC Company agreed to service the loans without explicitly stating the compensation. The fair value of the service is $50. What are the net proceeds received and the gain (loss) on the sale?

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	Net proceeds received	Gain (loss)
a.	$2,200	$ 200
b.	$2,250	$ 250
c.	$2,150	$ 150
d.	$2,200	$(250)