Question
On January 1, 2022, ABC Inc. purchased as a long-term investment $100,000 of 8% bonds. On the purchase day, the market rate was 12%. Payment
On January 1, 2022, ABC Inc. purchased as a long-term investment $100,000 of 8% bonds. On the purchase day, the market rate was 12%. Payment Frequency is semi-annual (June 30 and December 31). The bonds mature on December 31, 2024. The market value of the bonds at the end of 2022 was $96,000. On July 1, 2023, ABC sold the bonds at $95,000. Assume that ABC classified the bonds as available-for-sale securities. Which of the following is correct?
The bonds' effect on 2023 other comprehensive income is ($2,584.)
The bonds' effect on 2023 net income is $5,930.Correct
Cash flow from operating activities in 2023 is $99,000
At the end of 2022, ABC debited loss on investment (unrealized, OCI) for $2,920.
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