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Eurrent Attempt in Progress An invertment company has the following three invertments: 1. A five-year bond that pays interest at 5% annually The bond will
Eurrent Attempt in Progress An invertment company has the following three invertments: 1. A five-year bond that pays interest at 5% annually The bond will beheld to maturity, when the principal amount will be collected. The company has decided not to usethefair value option. 2. Asix-year bond that pays interest at 7%. The bond may be held to maturity or may be sold. The company is keeping its options open and has not yet decided. In addition, thecompany has decided not to usethefair value option. 3. Aninvestment intheshares of apublicentity. The company has elected to usetheoption to account for this invertment at FVOCl. This invertment is not a significant influence investment. Which measurement model should the company use for each invertment? (Hint: Usethedecision tree to help analyzethis situation. At each decision point in thedecision tree, analyzethe next step.) Eurrent Attempt in Progress An invertment company has the following three invertments: 1. A five-year bond that pays interest at 5% annually The bond will beheld to maturity, when the principal amount will be collected. The company has decided not to usethefair value option. 2. Asix-year bond that pays interest at 7%. The bond may be held to maturity or may be sold. The company is keeping its options open and has not yet decided. In addition, thecompany has decided not to usethefair value option. 3. Aninvestment intheshares of apublicentity. The company has elected to usetheoption to account for this invertment at FVOCl. This invertment is not a significant influence investment. Which measurement model should the company use for each invertment? (Hint: Usethedecision tree to help analyzethis situation. At each decision point in thedecision tree, analyzethe next step.)
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