Question
Problem 17-4 Presented below is information taken from a bond investment amortization schedule with related fair values provided. These bonds are classified as available-for-sale. 12/31/14
Problem 17-4 Presented below is information taken from a bond investment amortization schedule with related fair values provided. These bonds are classified as available-for-sale.
12/31/14 12/31/15 12/31/16
Amortized cost $491,390 $519,050 $550,760
Fair value $497,230 $509,300 $550,760
(a) Indicate whether the bonds were purchased at a discount or at a premium.
(b) Prepare the adjusting entry to record the bonds at fair value at December 31, 2014. The Fair Value Adjustment account has a debit balance of $1,470 prior to adjustment.
(c) Prepare the adjusting entry to record the bonds at fair value at December 31, 2015.
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