Question
On January 1, 2019, a Company purchased 12% bonds having a maturity value of $500,000 for $537,907.40 (amortised cost at the end of 2019 would
On January 1, 2019, a Company purchased 12% bonds having a maturity
value of $500,000 for $537,907.40 (amortised cost at the end of 2019 would be 531,698.14). The bonds provide the bondholders with a 10% yield. They are dated January 1, 2019, and mature January 1, 2024, with interest receivable December 31 of each year. The companys business model is to hold these bonds to collect contractual cash flows.
Select one:
a. I want to leave this answer blank
b. The entry to record the purchase will include a debit to Debt investments for 500,000
c. The company will receive in cash interest for 60,000
d. The company will receive in cash interest for 50,000
e. The company will receive in cash interest for 64,548.8
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