David purchased a $5,000 bond on the secondary market. He paid a $500 premium. What is David's basis? A. $500
B. $4,500
C. $5,000
D. $5,500
E. Mark for follow up

David's basis on the $5,000 bond purchased is:

C. $5,000.

Explanation:

a) Data and Analysis:

Cost of Investment in bond = $5,000

Premium paid = $500

b) David's basis on the bond is the quoted price of the bond, which is a security investment.  It is on this basis price that future interest will be calculated.  The additional $500 as premium he paid is just an additional cost which he incurred in exchange for his interest in the bond.  It does not form part of the basis.

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answerpounds of plastic to purchase 200+60-20=(240);