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Garcia Company acquired $3,516,000face? value, 9% bonds as a trading debt investment onJanuary 1 of the current year when the market rate of interest was

Garcia Company acquired $3,516,000face? value, 9% bonds as a trading debt investment onJanuary 1 of the current year when the market rate of interest was 11%.Interest is paid annually each December 31. Garcia purchased the? bonds, which mature in 12 ?years, for $3,059,458. Garcia amortizes the discount using the effective interest rate method. The fair value of the bonds at the end of the year is $3,017,000.

Prepare the journal entries required on the date of acquisition and at the end of the first year after acquisition. This includes the entry to record the fair value adjustment.

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