Question
On January 1, 20X5, Hillside Inc. bought $3,750,000 of five-year, 8% Straight Arrow bonds. The bonds pay interest annually on December 31. When Hillside bought
On January 1, 20X5, Hillside Inc. bought $3,750,000 of five-year, 8% Straight Arrow bonds. The bonds pay interest annually on December 31. When Hillside bought the bonds, the market rate of interest was 7% and the company classified the bond investment as FVOCI.
Market value information on the bonds:
Date Market value
December 31, 20X5 $3,900,000
December 31, 20X6 3,800,000
December 31, 20X7 3,850,000
December 31, 20X8 3,650,000
December 31, 20X9 3,750,000
What is the balance in the reserves account accumulated other comprehensive income (AOCI) at December 31, 20X6, that is associated with these bonds?
a) $22,980 CR
b) $48,411 DR
c) $71,391 DR
d) $94,371 DR
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Principles Of Auditing And Other Assurance Services
Authors: Ray Whittington, Kurt Pany
21st Edition
978-1259916984
