Part 1: is paid annually on December 31. The bonds sold for $124.920 at an effective...

Transcribed Image Text:

Part 1: is paid annually on December 31". The bonds sold for $124.920 at an effective interest rate of 7 Free Company purchased $120,000 of 8%, 5 year bonds from GE Company on January 1, 2020. In Company classified the debt investment as Available for Sale and uses the effective interest method. T was Free's Company first AFS Debt Investment. At the end of the year, this investment had a fair value 124920 97 of $126,000. Prepare all 2020 entries for Free Company beginning with the purchase of the investment on 1/1/2020. Dr Part 1: is paid annually on December 31". The bonds sold for $124.920 at an effective interest rate of 7 Free Company purchased $120,000 of 8%, 5 year bonds from GE Company on January 1, 2020. In Company classified the debt investment as Available for Sale and uses the effective interest method. T was Free's Company first AFS Debt Investment. At the end of the year, this investment had a fair value 124920 97 of $126,000. Prepare all 2020 entries for Free Company beginning with the purchase of the investment on 1/1/2020. Dr