Question
Pina Company loans Sarasota Company $2,110,000 at 6% for 3 years on January 1, 2017. Pina intends to hold this loan to maturity. The fair
Pina Company loans Sarasota Company $2,110,000 at 6% for 3 years on January 1, 2017. Pina intends to hold this loan to maturity. The fair value of the loan at the end of each reporting period is as follows. December 31, 2017 $2,161,000 December 31, 2018 2,130,000 December 31, 2019 2,110,000 Prepare the journal entry(ies) at December 31, 2017, and December 31, 2019, for Pina related to these bonds, assuming (a) it does not use the fair value option, and (b) it uses the fair value option. Interest is paid on January 1. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
No. Date Account Titles and Explanation Debit Credit To record interest revene To record fair value adjustment) To record interest reveneStep by Step Solution
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