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Investments Available for Sale Securities Ex.1 On January 1,2018, Tracy Co. purchased bonds with a maturity value of $300,000 for $322,744.44 Stated rate is 12%
Investments Available for Sale Securities Ex.1 On January 1,2018, Tracy Co. purchased bonds with a maturity value of $300,000 for $322,744.44 Stated rate is 12% and the bonds provide the bondholders with a 10% yield. The bonds are dated Jan. 1, 2018 , and mature on Jan. 1, 2023. Interest is receivable December 31 of each year. The bonds are classified as AFS. The fair value of the bonds at December 31 of each year is as follows: 20182019202020312012$320,500$309,000$308,000$310,000$300,000 Required: a) Prepare the journal entry on Jan. 1,20=8 b) Prepare the journal entries to record the interest received and recognition of fair value for 2018 c) Prepare the journal entries to record the interest received and recognition of fair value for 2019
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