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3 I. Robert Company purchased $100,000 of 8%, 5-year bonds of Evergreen Corp. on January 1, 20x1. The Evergreen bonds yield 10.25%. Interest is payable

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I. Robert Company purchased $100,000 of 8%, 5-year bonds of Evergreen Corp. on January 1, 20x1. The Evergreen bonds yield 10.25%. Interest is payable each July 1 and January 1. The market value on December 31, 20x1 was $92,500 and all bonds were sold for $93,300 on January 1, 20x2 before the scheduled interest receipt. a) Using the Excel, compute the price of the Evergreen bonds on January 1, 20x1 b) Prepare the amortization schedule for 5 years. c) Assuming the bond investment is classified as the available for sales security, prepare the journal entries for Robert on: January 1, 20x1 (investment) July 1, 20x1 (cash receipt) December 31, 20x1 (adjusting entry for accrued interest) January 1, 20x2 (sale of bonds) d) What would be the journal entry for the sale of bonds on January 1, 20x2 if the bond investment is classified as the trading security.

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