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A company purchases corporate bonds for $1,000,000 and categorizes them as AFS. At year-end, their market value is $750,000. $100,000 of the decline in value
- A company purchases corporate bonds for $1,000,000 and categorizes them as AFS. At year-end, their market value is $750,000. $100,000 of the decline in value is attributed to a rise in market interest rates, and $150,000 of the decline is attributed to credit losses.
Prepare the year-end adjusting entry in either a T-account or spreadsheet format.
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