Question
On July 1, 2016, Lex Co. purchased 600 of the $1,000 face value, 8% bonds of Zenon, Inc., for $630,000 (a 7% effective interest rate).
On July 1, 2016, Lex Co. purchased 600 of the $1,000 face value, 8% bonds of Zenon, Inc., for $630,000 (a 7% effective interest rate). The bonds, which mature on July 1, 2021, pay interest semiannually on January 1 and July 1. Lex used the effective interest method of amortization and appropriately recorded the bonds as non-trading. On Lex's December 31, 2016 statement of financial position, what would be the carrying value of the bonds?
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Advanced Accounting
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng
12th edition
1305084853, 978-1305464803, 130546480X, 978-1305799448, 978-1305084858
