What is the result of selling bonds at an amortized cost greater than the selling price?

When bonds are sold at a price that is lower than their amortized cost, this results in a loss on the sale of investments. Amortized cost represents the estimated value of the bond, taking into account any premiums or discounts that may have been assigned to it at the time of purchase.

When the selling price is below this amortized cost, the difference signifies a loss. This loss reflects that the bond has been sold for less than what it was worth on the balance sheet, and it has implications for the financial statements. Specifically, when accounting for the transaction, the loss would be recognized in the income statement, which would reduce the overall profitability for that period.

This is essential in bond accounting, as it influences both financial performance and the valuation of investments within the company's portfolio. Understanding this concept is crucial for evaluating investment activities and their impacts on financial results.