Show all calculations Points will be deducted for lack of calculations Sierra River Corp purchased $1,000,000 10 year bonds at 96 ($960,000) when the market yield was 8 The bonds pay interest at the rate of 6 annually on December 31 At year end, the bonds were trading at 96 5 Requirements If the bonds are held to maturity, prepare the year end journal entry using the Straight Line Amortization method Indicate each account category, for example, Cash (A ) If the bonds are not held to maturity and kept at Trading Securities, prepare the year end journal entry using the Fair Value method Indicate each account category, for example, Cash (A ) If the bonds are not held to maturity and kept as Available for Sale Securities, prepare the year end journal entry using the Fair Value method Indicate each account category, for example, Cash (A )

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Show all calculations : Points will be deducted for lack of calculations. Sierra River Corp. purchased $1,000,000 10-year bonds at 96 ($960,000) when the market

Show all calculations:

Points will be deducted for lack of calculations.

Sierra River Corp. purchased $1,000,000 10-year bonds at 96 ($960,000) when the market yield was 8%. The bonds pay interest at the rate of 6% annually on December 31. At year-end, the bonds were trading at 96.5.

Requirements:

If the bonds are held to maturity, prepare the year-end journal entry using the Straight-Line Amortization method. Indicate each account category, for example, Cash (A+).
If the bonds are not-held-to maturity and kept at Trading Securities, prepare the year-end journal entry using the Fair Value method. Indicate each account category, for example, Cash (A+).
If the bonds are not-held-to maturity and kept as Available-for-Sale Securities, prepare the year-end journal entry using the Fair Value method. Indicate each account category, for example, Cash (A+).