The following transactions relate to bond investments of Livermore Laboratories. The companys fiscal year ends on December

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The following transactions relate to bond investments of Livermore Laboratories. The company’s fiscal year ends on December 31. Livermore uses the straight-line method to determine interest.


Required:
1. Prepare the appropriate journal entries for these long-term bond investments.
2. By how much will Livermore Labs’ earnings increase in each of the three years as a result of these investments? (Ignore income taxes.)

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