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can you please show your work so i can learn, thanks on January 1, 2024 Ithaca corporation purchases Cortland Inc. bonds that have a face
can you please show your work so i can learn, thanks
on January 1, 2024 Ithaca corporation purchases Cortland Inc. bonds that have a face value of $300,000. The Cortland bonds have a stated interest rate of 7%. Interest is paid semi annually on June 30 and December 31, and the bonds mature in 10 years. For bonds of similar risk and maturity, the market yield on particular dates is as follows January 1, 2024 8%
June 30, 2024 9%
December 30, 2020 for 10%.
1a. calculate the price Ithaca would have paid for the Cortland bonds on January 1, 2020 for ignoring brokerage fees.
1b. Prepare a journal entry to record the purchase.
2. Prepare all appropriate journal entries related to the bond investment during 2024, assuming Ithaca accounts for the bonds as a held to maturity investment. Ithaca calculates interest revenue at the effective interest rate, as of the date it purchased the bonds.
3. Prepare all the appropriate journal entries related to the bond investment during 2024, assuming that Ithaca chose the fair value option when the bonds were purchased, and that Ithaca determines fair value of the bonds semi annually. Ithaca calculates interest revenue at the effective interest rate, as of the date it purchased the bonds
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