Question
please answer all parts (: Use the following information to answer parts a-c : Beta Inc. acquired $120,000 of Alpha Inc. bonds at face value
please answer all parts (:
Use the following information to answer parts a-c :
Beta Inc. acquired $120,000 of Alpha Inc. bonds at face value on April 30, 2021. The bonds pay interest at 3% on April 30, and October 31. At December 31, 2021, Beta classified the Alpha bonds as available for sale. On the same date, the market value of the bonds was $119,400. On April 30, 2022, Beta sold the Alpha bonds for $118,300.
a. For the year ended December 31, 2021, which of the following statements pertaining to Betas investment in Alpha Inc.s bonds is correct?
- Interest revenue of $2,400 is reported under other income on the income statement.
- An unrealized holding loss $600 is reported in other comprehensive income.
- A and B.
- Neither A nor B.
b .For the year ended December 31, 2022, which of the following statements pertaining to Betas investment in Alpha bonds is correct?
- Interest revenue of $1,800 is reported under other income on the income.
- A realized loss of $1,700 from the sale of bonds is reported under other income on the income statement.
- A and B.
- Neither A nor B.
c. For the year ended December 31, 2022, which of the following disclosures is reported in other comprehensive income?
- An unrealized holding loss of $1,100.
- A reclassification adjustment of $1,700 for the loss included in net income.
- A and B.
- Neither A nor B.
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