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On 6/1/18, Sugar Rush purchases bonds from Cookie Craving, paying $500,000. The bonds have a par value of $500,000, a stated rate of 9%, and
On 6/1/18, Sugar Rush purchases bonds from Cookie Craving, paying $500,000. The bonds have a par value of $500,000, a stated rate of 9%, and a maturity date of 5/31/22. Interest on the bonds is paid annually each 5/31. The fair value of the bonds equals $501,000 as of 12/31/18. Assume INSTEAD that Sugar Rush purchased the bonds with the intent to actively trade them. Sugar Rush makes an adjusting entry on 12/31/18 to adjust the investment to market value. What effect will this specific adjusting entry have on the company's net income (i.e., revenues / expenses)? If the adjusting entry will increase the company's net income, make your answer la positive number. If the adjusting entry will decrease the company's net income, make your answer a negative number. If there will be no effect on net income, answer with 'O: HINT: record al journal entries for the company, then answer the
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