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Question 1 (17 points) On January 1, 2018, Hyde Technologies Inc. paid $2,080,589 to acquire $2,000,000 in bonds that mature in three years. The bonds
Question 1 (17 points) On January 1, 2018, Hyde Technologies Inc. paid $2,080,589 to acquire $2,000,000 in bonds that mature in three years. The bonds provide the bondholders with a 6.5% per annum yield. The face value of the bonds is $2,000,000 and the bonds pay interest semi-annually at 8% per annum on June 30 and December 31. Assume that the fair values of the bonds were as below: Date Fair value December 31, 2018 $2,070,000 December 31, 2019 2,050,000 December 31, 2020 2,000,000 The investment was classified as FV-OCI by Hyde Technologies. Required: A. Prepare the complete amortization schedule. (6 marks) B. Prepare the journal entries on following dates: (5 marks) o January 1, 2018. o December 31, 2018 December 31, 2020 2.000.000 The investment was classified as FV-OCI by Hyde Technologies. Required: A. Prepare the complete amortization schedule. (6 marks) B. Prepare the journal entries on following dates: (5 marks) o January 1, 2018. o December 31, 2018 C. Prepare the journal entries to record the sale of the investment for $2,075,000 on January 1, 2019, reclassifying any accumulated holding gains or losses to net income. (6 marks)
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