1) On July 1 of 2021, Inpixar Inc. issued $250,000 of 9% bonds to RAST Corp. The bonds pay interest semiannually on June 30 and December 31, and have a maturity date of June 30, 2025. Management of RAST Corp intends to hold the investment to maturity. On July 1, 2021, the rate for bonds of similar risk and maturity was 8%. On July 1, 2021, which of the following entries would RAST Corp record to recognize the purchase?

a) DR to Premium on Inpixar Bonds. b) DR to Discount on Inpixar Bonds. c) DR to Investment in Inpixar Bonds for $250,000.

d) DR to Investment in Inpixar BoNDs for $259,500.

2) Refer to the facts in problem 1. If RAST Corp holds the bonds on June 30, 2022, how much cash will they receive from Inpixar for the first bond coupon payment? a) $22,500 b) $20,000

c) $11,250

d) $10,000

3) True/False. If the market value of the Inpixar bonds was higher than amortized cost of the bonds reported on RAST Corps balance sheet at December 31, 2021, RAST Corp would recognize an unrealized holding gain on the bonds, which would increase 2021 other comprehensive income. a) True

b) False