On January $1,2024,$ Parker Inc. purchased $$100,000$ of Amy Company bonds at a discount of $$5,000.$ The

Amy bonds pay $6\%$ interest but were purchased when the market interest rate was $7\%$ for bonds of

similar risk and maturity. The bonds pay interest semiannually on June $30$ and December $31$ of each

year. On December $31,2024,$ the bonds have a fair value of $$90,000.$

$1.$ Assume Parker accounts for the bonds as a held$-$to$-$maturity investment and uses the effective

interest method. How would Parker report these bonds on its $2024$ Balance Sheet, Income

Statement and Statement of Cashflow?

$2.$ Continuing from question $1,$ assume Parker sold the bonds on January $1,2025,$ for $$96,000.$

Please journalize this transaction.

$3.$ Instead, Assume Parker accounts for the bonds as a trading investment and uses the effective

interest method. How would Parker report these bonds on its $2024$ Balance Sheet, Income

Statement and Statement of Cashflow?

$4.$ Continuing from question $3,$ assume Parker sold the bonds on January $1,2025,$ for $$96,000.$

Please journalize this transaction.