Question
On December 31, 20x3, the Laurel Corporation purchased bonds of another company.The bonds had a face value of $200,000, mature on December 31, 20x17, and
On December 31, 20x3, the Laurel Corporation purchased bonds of another company.The bonds had a face value of $200,000, mature on December 31, 20x17, and pay acoupon rate of 4% semi-annually on June 30 and Dec 31. The bonds were yielding 3.5% on the date of purchase. Laurel paid $4,500 in transaction costs.
On December 31, 20x4 and 20x5 the bonds are trading at 105 and 103.2 respectively.
On January 2, 20x6, the bonds are sold at 103 less $4,000 in transaction costs.
Prepare all journal entries for December 31, 20x3 through January 2, 20x6 on the assumption that the securities are classified as
a. Amortized Cost
b. FVTOCI
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College Accounting A Contemporary Approach
Authors: David Haddock, John Price, Michael Farina
4th edition
978-1259995057, 1259995054, 978-0077503987, 77503988, 978-0077639730
