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please let me know the answer to these two questions. These are related questions E10-2 AS Company buys a marketable security on January 1, 2002,
please let me know the answer to these two questions. These are related questions
E10-2 AS Company buys a marketable security on January 1, 2002, that is expected to pay off $1,000 on December 31, 2005. AS believes a 7% interest rate is appropriate. Required: a. Determine how much AS paid for the security. b. Fill in the following chart with the economic value of the security on the dates indi- cated, assuming that events unfold as expected. 1/1/02 12/31/02 1 2/31/03 12/31/04 12/31/05 Date Value E10-5 Refer to the information regarding AS Company in E10-2. Assume that the security is a held-to-maturity security. Required: a. Prepare the journal entry to record the purchase of the security on January 1, 2002. b. Prepare the adjusting entry that would be required on December 31, 2002. C. How will the accounting for the security affect AS's income statement and balance sheet for 2002? d. Assume that the market value of the security is $20.38 higher than the value shown by the company after the December 31, 2002 entry. What adjustment would be nec- essaryStep by Step Solution
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