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2. On August 1, 2014, Harley Inc. acquired $180,000 (face value) 10% bonds of Davidson Corporation at 104 plus accrued interest. The bonds were dated

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2. On August 1, 2014, Harley Inc. acquired $180,000 (face value) 10% bonds of Davidson Corporation at 104 plus accrued interest. The bonds were dated May 1, 2014, and mature on April 30, 2017, with interest payable each October 31 and April 30. The bonds will be held to maturity. Assuming the amortized cost model is used, the entry to record the purchase of the bonds on August 1, 2014 is a) Investment in Bonds ......................... 191,700 Cash ........................................... 191,700 b) Investment in Bonds ......................... 187,200 Interest Revenue .............................. 4,500 Cash 191,700 c) Investment in Bonds ......................... 191,700 Interest Revenue ....................... 4,500

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